The Babylon Village area was first settled in 1689. English settlers were attracted to the area by an abundant supply of salt hay that was harvested to provide feed and bedding for livestock in the northern part of Huntington Town. Before long, settlers came to the area for easy access to fishing, clamming and hunting. The Village's first permanent dwelling was built by Nehemiah Heartt, Sr. around 1760.
The community was named by Phoebe Conklin, in 1803, who likened the raucous settlement to biblical Babylon. The first house of worship, the First Presbyterian Church, was built in 1783, and the first school was built in 1805.
The arrival of the South Side Railroad, in 1867, established Babylon as a premier resort destination. In the late 1800s, hotels dotted Deer Park Avenue and Main Street. A horse car route (and later trolleys) conveyed vacationers to the docks where steamboats stood ready to transport them to the barrier island settlements, including David S.S. Sammis' Surf Hotel on Fire Island.
In 1893, Babylon Village became the first incorporated village in in the Town of Babylon.