In 1825, George Tillson, a Massachusetts native, made a prospecting tour from Normandale on Lake Erie in search of iron ore. Tillson settled on the future site of Tillsonburg, led to this spot by the Otter River winding its way through the dense forests of oak, pine, ash and black cherry. He purchased six hundred acres in the Township of Derham.

In 1836 the settlement was surveyed and the name Dereham Forge changed to Tillsonburg. Another milestone in the community's history was its incorporation as a town in 1872. E.D. Tillson became the first Mayor.

Tillsonburg was first settled by George Tillson, a Massachusetts native, who in 1825 set out from Normandale on Lake Erie in a search for iron ore. Led to the spot by the Otter River Tillson purchased six hundred acres in the township of Derham. In 1836 the settlement was surveyed and the name Dereham Forge changed to Tillsonburg. In 1872 the community was incorporated into a town and named Tillsonburg. E. D. Tillson became the first mayor.

Tillsonburg is home to the Annandale National Historic Site. This Tillson Avenue home today is a museum featuring unique hand painted ceilings, inlaid floors, ornate mantels and wonderful stained glass. The local Craft Guild is housed in the Station Arts Centre and is also home to the local Farmers Market.