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Before the 17th century, the Wampanoag Native Americans, who had settlements throughout southeastern Massachusetts and Rhode Island, including Martha's Vineyard and Nantucket, were the only inhabitants of the lands along the Acushnet River. Their population is believed to have been about 12,000. While exploring New England, Bartholomew Gosnold landed on Cuttyhunk Island on May 15, 1602. From there, he explored Cape Cod and the neighboring areas, including the site of present-day New Bedford. However, rather than settle the area, he returned to England at the request of his crew.^{[citation needed]}

A group of English Quakers from the Plymouth Colony—who as pacifists held ideological differences with the Puritans on the question of taxes to fund a military—separated and established the first European settlement on the South Coast in 1652. They purchased Old Dartmouth—a region that is now Dartmouth, Acushnet, New Bedford, Fairhaven, and Westport—from Chief Massasoit of the native Wampanoag to start a new society. Whether the transfer of the land was legitimately done has been the subject of intense controversy. Like other native tribes, the Wampanoags did not share the settlers' concepts of private property. The tribe may have understood they were granting usage rights to the land, not giving it up permanently.

At first, Old Dartmouth's 115,000 acres (470 km²) of territory was devoid of major town centers, and had isolated farms and small villages instead. At this time, the economy primarily ran on agriculture and fishing. Land availability attracted many Quakers and Baptists from Newport and Portsmouth in Rhode Island, as well as more Puritans migrating from Britain.

The rising European population and increasing demand for land led the colonists' relationship with the Native Peoples of New England to deteriorate. European encroachment and disregard for the terms of the Old Dartmouth Purchase led to King Philip's War in 1675. In this conflict, Wampanoag tribesmen, allied with the Narragansett and the Nipmuc, raided Old Dartmouth and other European settlements in the area. Europeans in Old Dartmouth garrisoned in sturdier homes—John Russell's home at Russells Mills, John Cooke's home in Fairhaven, and a third garrison on Palmer Island.

A section of Old Dartmouth near the west bank of the Acushnet River, originally called Bedford Village, was officially incorporated as the town of New Bedford on February 23, 1787 after the American Revolutionary War. The name was suggested by the Russell family, who were prominent citizens of the community. The Dukes of Bedford, a leading English aristocratic house, also bore the surname Russell. (Bedford, Massachusetts had been incorporated in 1729; hence "New" Bedford.)

The late 18th century was a time of growth for the town. A small whale fishery developed, as well as modest international trade. In the 1760s, between the Seven Years' War and the American Revolution, shipwrights, carpenters, mechanics, and blacksmiths, settled around New Bedford harbor, creating a skilled and comprehensive maritime community.

New Bedford's first newspaper, The Medley (also known as the New Bedford Marine Journal), was founded in 1792. On June 12, 1792, the town set up its first post office. William Tobey was its first postmaster. The construction of a bridge (originally a toll bridge) between New Bedford and present-day Fairhaven in 1796 also spurred growth. (Fairhaven separated from New Bedford in 1812, forming an independent town that included both present-day Fairhaven and present-day Acushnet.)

Nantucket had been the dominant whaling port, though the industry was controlled by a cartel of merchants in Boston, Newport, and Providence. In the 1760s, Nantucket's most prominent whaling families moved to New Bedford, refining their own oil and making their own premium candles.

The American Revolutionary War completely paralyzed the whaling industry. British forces blockaded American ports and captured or destroyed American commercial ships; they even marched down King's Street in New Bedford (defiantly renamed Union Street after the Revolution) and set businesses on fire.

Nantucket was even more exposed, and the physical destruction, frozen economy, and import taxes imposed after the war obliterated previous fortunes. New Bedford also had a deeper harbor and was located on the mainland. As a result, New Bedford supplanted Nantucket as the nation's preeminent whaling port, and so began the Golden Age of Whaling.

After the War of 1812's embargo was lifted, New Bedford started amassing a number of colossal, sturdy, square-rigged whaling ships, many of them built at the shipyard of Mattapoisett. The invention of on-board tryworks, a system of massive iron pots over a brick furnace, allowed the whalers to render high quality oil from the blubber. This allowed the whaling ships to go out to sea for as long as four years, processing their catch while at sea. Ships from New Bedford came back to port with barrels of oil, spermaceti, and occasionally ambergris.

Whaling dominated New Bedford's economy for much of the century, and many families of the city were involved with it as crew and officers of ships. The Quakers remained prominent and influential in New Bedford throughout the whaling era. They brought religious values into their business models, promoting stability as well as prosperity, investing in infrastructure projects such as rail, and employing without discrimination. They established solid social and economic relationships with Boston, New York, and Philadelphia, integrating New Bedford into the urban northeastern economy.

Ten thousand men worked in the whaling industry. During this period, New Bedford's population increased from approximately 4,000 in 1820 to about 24,000 in 1860. At the height of the whaling industry in 1857, the harbor hosted 329 vessels worth over $12 million, and New Bedford became the richest city per capita in the world.

On March 18, 1847 the town of New Bedford officially became a city; Abraham Hathaway Howland was elected its first mayor.

The Quakers of New Bedford applied their principles of egalitarianism and community-building in their businesses. On the boats, at the docks, at the factories, or in the shops—British, Wampanoag, Cape Verdean, Azorean, Irish, and West African hands found work in New Bedford.

New Bedford also became one of the first fermentation centers of abolitionism in North America, and an important stop on the Underground Railroad. Many people were attracted by New Bedford's relatively open-minded atmosphere. For example, Paul Cuffe—an Ashanti-Wampanoag Quaker and self-made tycoon—among several other remarkable achievements earned black property owners in New Bedford the right to vote decades before Abraham Lincoln even signed the Emancipation Proclamation.Lewis Temple, an African-American blacksmith, invented the Temple toggle iron, which was the most successful harpoon design.Frederick Douglass, the famous social reformer and orator, also found amnesty in New Bedford and worked at the wharf for three years.

The whaling industry went into decline after the 1859 discovery of petroleum in Pennsylvania. Each decade since then saw a gradual decrease in whaling work, activity, and revenue. During the Civil War, the Confederacy engaged in commerce raiding with ships such as the Alabama, the Florida, and the Shenandoah, trying to attack the Yankee whaling industry and sabotage the US economy. Additionally, the US federal government bought several inactive whalers, filled them with stones, sand, and dirt, and towed them to Charleston, South Carolina where the Union Navy sank what became known as the Stone Fleet in an unsuccessful attempt to blockade the Confederate bay. Along with the poor business and low whale populations, this dealt a potent blow to a failing industry.

In the midst of this decline, greater New Bedford's economy became more dependent on the textile industry, which began to eclipse the whaling industry in the late 19th century. The mills grew and expanded constantly, eventually comprising multiple sites along the Acushnet River. In 1875 alone, the Wamsutta Mills processed 19,000 bales of cotton into 20 million yards of cloth, which had a wholesale value comparable to that of the entire whaling catch, and continued to produce over 20 million yards of cloth yearly after 1883. The Wamsutta Mills remained the world's largest weaving plant until 1892.

The textile mills redefined wealth in New Bedford, and gave birth to a prosperity greater than that of the whaling industry. New Bedford, funded by industrial fortunes, developed a thriving art scene. The Mount Washington Glass Company (which later became Pairpoint) crafted works of glass and silver for the newly affluent class, and examples of these works can be seen today on the second floor of the New Bedford Whaling Museum.^{[citation needed]}

Until 1800, New Bedford and its surrounding communities were, by and large, populated by Protestants of English, Scottish, Welsh, and Dutch origin. During the first half of the 19th century many Irish people came to Massachusetts. In 1818, Irish immigrants established the Catholic mission that built St. Mary's Church. Later in that century, immigrants from Portugal and its colonial possessions in the Atlantic—Cape Verde, the Azores, and Madeira—began arriving in New Bedford and the surrounding area, attracted by jobs in the whaling industry; many had family members who had worked on whaling ships. As the Portuguese community began to increase in population, it established the first Portuguese parish in the city, St. John the Baptist (1871). French Canadians also secured a foothold in New Bedford at about the same time, and they built the Church of the Sacred Heart in 1877.

Similarly, Polish immigrants began arriving in the late 19th century and established the parish of Our Lady of Perpetual Help in 1903. A number of Jewish families, arriving in the late 19th century, were active in the whaling industry, selling provisions and outfitting ships. During the years leading up to the First World War, a sizable eastern-European Jewish community joined them in New Bedford. Some became prominent merchants and businessmen, mainly in textiles and manufacturing.

Fishing and manufacturing continue to be two of the largest businesses in the area, and healthcare has become a major employer. The three largest single employers based in New Bedford are Southcoast Hospitals Group, one of the top ten employers in Massachusetts (healthcare), Titleist (golf clubs, balls, apparel, manufacturing), and Riverside Manufacturing (apparel manufacturing).^{[citation needed]}

According to a 2001 study by the University of Massachusetts Dartmouth Center for Policy Analysis, the three largest employment sectors in the Greater New Bedford area (the area includes New Bedford and Acushnet, Dartmouth, Fairhaven, Freetown, Lakeville, Marion, Mattapoisett, Rochester, and Wareham) were as follows: services (26% of total employment); wholesale trade (22%); manufacturing (19%). The largest industries by employment in the area were as follows: health services, eating and drinking places, wholesale trade, food stores, and social services.^{[citation needed]}

In 2002, the city received $61,194,358 in taxation revenue, $44,536,201 in local receipts, and $12,044,152 classified as other available.

In 2005 the unemployment rate was 7.3%, having dropped throughout the 1990s from 12.5% to 5.3% in 2000, and then having risen to 10.4% in 2003. By 2009, in the midst of the economic crisis of the era, the unemployment rate got as high as 12.4%.

In 2005, the city received $104,925,772 for education, and $22,755,439 for general government from the State of Massachusetts.

In 2016, the city hopes its proximity to Massachusetts' southern coastline will allow it to become a center for the growing wind energy market. Three companies, OffshoreMW, Deepwater Wind, and DONG Energy, have leased portions of New Bedford's Marine Commerce Terminal for the staging of turbines and platforms.

In 1847, the New Bedford Horticultural Society was begun by James Arnold.

The Ash Street Jail, which houses inmates from Bristol County, is located in New Bedford. It opened in 1829 and is the oldest continuously operating jail in the United States.

Fort Taber and Fort Rodman (also called the "Fort at Clark's Point") were built during the American Civil War and are now in Fort Taber Park. Both forts are often called Fort Taber, including in some references.

New Bedford and surrounding communities are a part of the Providence metropolitan area. The Greater Providence-Fall River-New Bedford area is home to the largest Portuguese-American community in the United States.

At the 2010 census, there were 95,072 people, 39,204 households and 24,990 families residing in the city. The population density was 4,760 per square mile (1,799/km²). There were 42,781 housing units at an average density of 2,063/sq mi (797/km²). The racial makeup of the city was 72.17% (66.1% Non-Hispanic) White, 9.69% African American, 0.1% Native American, 1.00% Asian, 0.05% Pacific Islander, 13.51% from other races, and 3.92% from two or more races. Hispanic or Latino people of any race were 16.11% of the population. The city is very multi-cultural and diverse. The ethnic makeup of the city is estimated to be 33.8% Portuguese, 10.1% Puerto Rican, 9.1% French, 8.8% Cape Verdean, 6.9% Irish, 5.3% English.

There were 39,208 households, of which 31.2% had children under the age of 18 living with them, 37.5% were married couples living together, 20.9% had a female householder with no husband present, and 36.9% were non-families. 31.6% of all households were made up of individuals, and 13.6% had someone living alone who was 65 years of age or older. The average household size was 2.40 and the average family size was 3.01.

Age distribution was 24.9% under the age of 18, 9.5% from 18 to 24, 28.8% from 25 to 44, 20.2% from 45 to 64, and 16.7% who were 65 years of age or older. The median age was 36 years. For every 100 females, there were 89.1 males. For every 100 females age 18 and over, there were 84.4 males.

The median household income was $37,569, and the median family income was $45,708. Males had a median income of $37,388 versus $27,278 for females. The per capita income for the city was $15,602. About 17.3% of families and 20.2% of the population were below the poverty line, including 29.1% of those under age 18 and 15.7% of those age 65 or over.

Paul Cuffee, a merchant and ship's captain of Native and African (Ashanti of Ghana) origin, was born in nearby Cuttyhunk and settled in Westport, Massachusetts. Many of his ships sailed out of New Bedford.

Lewis Temple was an African-American blacksmith who invented the toggle iron, a type of toggling harpoon, which revolutionized the whaling industry and enabled the capture of more whales. There is a monument to Temple in downtown New Bedford.

In 1838, Frederick Douglass, the runaway slave who became a famous abolitionist, settled in New Bedford. He writes in detail about the life and times of New Bedford in the late 1840s in his celebrated autobiography. A historic building and monument dedicated to Douglass can be found today at the Nathan and Polly Johnson properties. Frederick Douglass was not the only fugitive slave or freedman to see New Bedford as a welcoming place to settle. New Bedford had a small but thriving African-American community during the antebellum period. It was the home of a number of members of the 54th Massachusetts Regiment, an American Civil War regiment which fought, with considerable distinction, to preserve the Union. The 54th Massachusetts was the first regiment in the country's history formed entirely by African-American troops (who served with white officers). The most famous of these soldiers was William Harvey Carney, who made sure that the American flag never touched the ground during the Union assault on Fort Wagner, South Carolina, near Charleston. There is an elementary school in New Bedford named in his honor.

Patrick Cunningham was an Irish immigrant who lived in New Bedford. He was an inventor known for building a torpedo which he later fired down a street in the city.

Bishop "Sweet Daddy" Grace, native of Brava, Cape Verde, was a New Bedford resident who founded the United House of Prayer for All People, one of the largest African-American sects in America. He is buried in New Bedford.