Around 1830, St. Jacobs was settled by such early arrivals as the Simon Cress family, Abraham Erb and John B. Baumann. Growth of the area was slow until the early 1850’s when a new group of settlers, Mennonites from Pennsylvania, the so-called Pennsylvania Dutch arrived (the word “Dutch” does not refer to the Netherlands, but to “Deitsch” or “Deutsch” which mean “German”). These settlers became known as “Old Order” Mennonites due to their conservative lifestyle.
Valentine Ratz built the first saw mill to the west of the settlement in 1844 and the first school, in a log house, was founded in the same year. Jacob C. Snider, of Swiss German descent, dammed the Conestoga River and built a saw mill, a flour mill and a woolen mill in 1852. These mills not only provided employment but also attracted more settlers to the area. A number of stores, including a cooperage shop, and a post office were established.
When the settlement became a village, it was named Jakobstettel (Jacob’s Village) in honour of Snider. The St. was added to the name Jacob simply to make it sound more pleasing; the pluralization was in honour of the combined efforts of Jacob C. Snider (1791–1865) and his son, Jacob C. Snider, Jr. (1822–1857).
An 1851 report indicates that the village itself had a flour mill owned by Benjamin D. Snyder, a hotel, a blacksmith, a general store and a cooperage. The first post office opened in 1852 with Joseph Eby as postmaster and the village was incorporated in that year. By 1855, there were four hotels, including Benjamins which still stands; it was later known as the Dominion Hotel. In 1871, E.W.B. Snider bought the flour mill and promoted hydro electricity and other milling operations. The river helped power mills and a woolen factory and a tannery; by then, the school had 66 students. There was only a single church, (Evangelical Association) built in 1850.
By 1855, the population had risen to about 400 inhabitants and by 1857, a formal plan of settlement had been adopted in hopes that their village would receive railway connection to the Grand Trunk Railway line that had arrived in Waterloo County in 1856.
Industry in 1867 included a flour mill, a tannery, a harness shop, a wagon maker, a woollen mill, and a barrel maker. There was also a distillery, several general stores and two hotels as well as artisans and tradesmen. John Ortwein produced the burned limestone that was used in the construction of various buildings and by 1869, the population had slowly grown to 500.
A rail line was not built here until 1891, but even that did not help to boost the population and St. Jacobs remained a small village, with virtually no growth until the 1950s. St. Jacobs remained a mostly rural village with the Snider mill at its centre and providing the usual amenities until its boom as a tourist destination in the later twentieth century. The population of St. Jacobs grew to 1,988 by 2016 and over 1 million people a year flood into St. Jacobs to shop at the Farmer’s Market.