Laurel was founded in 1683 and incorporated as a town on April 13, 1883 and was considered one of the wealthiest in the state, with 2,500 residents. The town consisted of eleven general stores, seven grocery stores, five millinery, three clothing, three drug stores, two furniture stores, one carriage factory, one sawmill, two blacksmith shops, two wheelwright shops, two butcher shops, two shoe shops, two barber shops, two hotels, five physicians, one dentist, and three churches. In the summer of 1899 a lighted kerosene lamp was overturned in a stairway near Central Avenue and Market Street. Without fire-fighting apparatus, the entire section of the north side of Market Street was destroyed. In an effort to prevent further disastrous fires, the Laurel Volunteer Fire Department was organized October 25, 1899.
Prior to 1883 Laurel was governed by a Board of Commissioners consisting of three members, with a fourth member being added later. In 1917 a new charter was approved and three Councilperson-at-large were added. In 2001, a change in the town's charter was approved, with the Town Council now consisting of six members, with terms of four years and a Mayor with a two year term.
Over Laurel's years of existence, the town has had five persons from the area serve as Governors of the state. Nathaniel Mitchell (1805 - 1808); John Collins (1821 - 1825); William Barkley Cooper (1841-1845); William Ross (1851 - 1855); and Elbert Nortrand Carvel (1949 -1953,1961 - 1965).
Laurel also is home to more historic buildings than any town in Delaware with 800 on the National Historic Record. The town's current population is 3,688.