The formation of Denton is closely tied with that of Denton County. White settlement of the area began in the middle of the 1800s when William S. Peters of Kentucky obtained a land grant from the Texas Congress and named it Peters Colony. After initial settlement in the southeast part of the county in 1843, the Texas Legislature voted to form Denton County in 1846. Both the county and the town were named for John B. Denton, a preacher and lawyer who was killed in 1841 during a skirmish with Kichai people in what is now Tarrant County. Pickneyville and Alton were selected as the county seat before Denton was named for that position in 1857. That year, a commission laid out the city and named the first streets.

On July 8, 1860, approximately one-half of the downtown Square burned down in what was later called the "Texas Troubles". Fires occurred in ten Texas communities that day, including Dallas and Pilot Point and were quickly attributed to a slave insurrection. By the end of July, vigilante justice took hold and "egularly constituted law-enforcement agencies stepped aside to allow the vigilantes to do their work. Although no hard evidence was ever adduced to prove the guilt of a single alleged black arsonist or white abolitionist, many unfortunates of both classes were nevertheless hanged for their alleged crimes."

In February 1861, a statewide referendum was held and Texans voted to join the Confederate States of America.

Denton incorporated in 1866; its first mayor was J.B. Sawyer. As the city expanded beyond its original boundaries (which extended half of a mile in every direction from center of the public square), it became an agricultural trade center for the mill and cottage industries. The arrival of the Texas and Pacific Railway in 1881 gave Denton its first rail connection and brought an influx of people to the area. North Texas Normal College, now the University of North Texas, was established in 1890, and the Girls' Industrial College, now Texas Woman's University, was founded in 1901. As the universities increased in size, their impact on Denton's economy and culture increased. Electricity came to Denton beginning in 1905 with the creation of Denton Municipal Electric.

After the Civil War, "Freedmen Settlements" were started throughout the South. One Freedman Settlement called Quakertown, thrived just south of what is now Texas Woman's University until around 1920, when the residents were forcibly removed by the City government to make way for a park. Quakertown's Black children were served separately from white children by the Frederick Douglass School. Originally scheduled to open in September 1913, it was mysteriously burned down the Sunday night prior to the scheduled opening. It was rebuilt and in 1949 renamed the "Fred Moore School".

Denton grew from a population of 26,844 in 1960 to 48,063 in 1980. Its connection to the Dallas-Fort Worth metroplex via I-35E and I-35W played a major role in the growth, and the opening of Dallas/Fort Worth International Airport in 1974 led to an increase in population. In the 1980s, heavy manufacturing companies like Victor Equipment Company and Peterbilt joined older manufacturing firms such as Moore Business Forms and Morrison Milling Company in Denton. The population jumped from 66,270 in 1990 to 80,537 in 2000. In May 2006, Houston-based real estate company United Equities purchased the 100-block of Fry Street and announced that several of the historic buildings would be demolished and the businesses displaced to accommodate a new mixed-use commercial center. The proposal drew opposition from some residents, who sought to preserve the area as a historic and cultural icon for the city. The Denton City Council approved a new proposal for the area from Dinerstein Cos in 2010.

Along with much of the Dallas–Fort Worth metroplex, Denton has grown rapidly in recent years, becoming the seventh fastest-growing city in the U.S. with a population over 100,000 between 2010 and 2011. The city has a population of 113,383 according to the 2010 United States Census, making it the 230th largest city in the United States and the 27th largest in Texas. The population density was 1,289.1 people per square mile. There were 46,211 housing units and 39,060 households in the city. The racial makeup of the city was 73.8% White, 10.3% African American, 4.1% Asian, 0.8% Native American, 0.1% Pacific Islander, and 3.2% from two or more races. Hispanics or Latinos of any race comprised 21.2% of the population. The median income for a household was $44,415 in 2010. The per capita income was $22,940. About 20.3% of the population were below the poverty line.