Settled by English colonists in 1684, Cambridge is one of the oldest colonial cities in Maryland. At the time of English colonization, the Algonquian-speaking Choptank Indians were already living along the river of the same name. During the colonial years, the English colonists developed farming on the Eastern Shore. The largest plantations were devoted first to tobacco, and then mixed farming. Planters employed many enslaved Africans for tobacco but needed less labor for mixed farming. The town was a trading center for the area. It was incorporated officially in 1793, and occupies part of the former Choptank Indian Reservation. Cambridge was named after the town and county in England.
Cambridge developed food processing industries in the late 19th century, canning oysters, tomatoes and sweet potatoes. Industrial growth in Cambridge was led by the Phillips Packing Company, which eventually grew to become the area's largest employer. The company won contracts with the Department of Defense during the First and Second World wars that aided its growth. At its peak, it employed as many as 10,000 workers. Changing tastes brought about a decline in business leading Phillips to downsize its operations. By the early 1960s the company ceased operations altogether. This led to wide scale unemployment and added to the city's growing social problems.
During the period from 1962 until 1967, Cambridge was a center of Civil Rights Movement protests as blacks sought access to work and housing. They also wanted to end racial segregation of schools and other public facilities. During the 1960s, race-related violence erupted on more than one occasion, and forces of the Maryland National Guard were assigned to the city to assist local authorities with peace-keeping efforts. With the passage of the Civil Rights Act in 1964, public segregation in Cambridge officially ended.
In 2002, the city's economy was boosted by jobs and tourism associated with the opening of
