Callensburg was surveyed in 1826, by Hugh Callen, Sr., who commissioned a young surveyor named Sidle Lobaugh to lay out a town on part of the 300 acres he had purchased in 1812. Callen anticipated the building of the Pennsylvania Canal through that region, and while the eventual route of the canal did not pass near Callensburg, the area still attracted enough settlers to form a borough. It was incorporated in 1851, and held the first town election on March 21, 1851.
