At the time of the earliest European settlements, where Holliston exists now was part of the territory of the Awassamog family of Natick (the first Nipmuc Praying Town), who also held authority over land near Waushakum Pond at Framingham and land near Annamasset at Mendon. In 1701, a large tract of land that included the west half of Holliston, eastern Milford and parts of Hopkinton and Ashland was given to the local Nipmucs in a land exchange with Sherborn. Their ownership of the tract was brief, as settlers purchased tracts of land there until all traces of Nipmuc presence disappeared.
The Nipmuc village of Mucksquit (translation – "place of much grass"), located on the shore of Wennakeening (translation – "smile of the great spirit") was near the site of the Morse family farm, today known as Lake Winthrop.
The Morses, Sheffields, Marshalls and Bullards and many others followed Pout Lane (an old Native American foot-path, now partly modern day Rte 16 and Highland St., respectively) out to the new territory and settled along the path, thus forming a cluster of farms that would eventually become Holliston. John Eliot and Daniel Gookin (Christian missionaries) also followed the path in search of converts to Christianity and encouraged the Nipmucs to gather into villages, which made their task of finding them easier. Though not as famous as the Bay Path or the Old Connecticut Path, Pout Lane played a major role in the settlement of Holliston and other points southwest of Boston.
Holliston, then part of Sherborn, was first settled by Europeans in 1659 by Massachusetts Bay Puritans. The town of Holliston was incorporated on December 3, 1724, by virtue of approval by the General Court petition requesting that "the western part of Sherborn be a Town." The name was taken in honor of Thomas Hollis of London, a benefactor of Harvard College. The first town meeting was held at the house of Timothy Leland on December 23, 1724, "at which five selectmen and all other required officers were chosen." The town has grown from a community of a few hundred residents setting aside ten pounds per year for public education to a community of over 13,000 with an annual budget of over $40 million including more than $23 million for a nationally recognized school system.
In "Holliston" by Images of America and the Holliston Historical Society, it is written: An article in a local newspaper in 1894 heralded the charms of Holliston as the quintessential New England village, which, the story said, sprang into existence solely due to the talent of its people. Perhaps this is so, for there was no great moment in history to mark the founding of this town. Holliston has become a reflection of the accomplishments of the inhabitants of this place for more than three hundred years, and although the town had to admit to no magnitude of greatness to rival Boston, Lexington, or Concord, Holliston did define itself as a home to heroes of the commonplace. The feature story of 1894 said:
"Many cities have sprung into existence because of their advantageous situations. The prosperity of Holliston is solely due to the genius of its people. A visit to such places stirs the blood, quickens the pulse and produces an enthusiastic desire to have a share in the developing good times. Massachusetts may be Whittier's land, and the region from Marblehead to Amesbury may be full of legendary and spectral armies, and witchdom, and Buddha knows what, but the imaginative and the poetical must submit to the rights of the commonplace. The commonplace is honeycombed with the uncommon heroisms of the patient, everyday existence that make up the life of such plucky towns as Holliston. These are the things the average man is most interested in. Average life is but a portfolio of views of struggles with the commonplaces of everyday existence" (Holliston 1997).
The town was once the largest producer of shoes in the United States. Although many of the shoe factories have been lost by fires and other problems, the largest company, the Goodwill Shoe Company, still has remaining empty factories on Water Street, many of which are now used as artists' studios. Competition from overseas factories is largely to blame for the loss of the industry.
Holliston's Mudville neighborhood claims to be the location of the 1888 Ernest Lawrence Thayer poem, "Casey at the Bat", and maintains an ongoing rivalry with Stockton, California, which makes the same claim regarding the poem's setting.