The Dutch first settled Delaware in 1631, although all of the original settlers were killed in a disagreement with local Indians. Seven years later, the Swedes set up a colony and trading post at Fort Christina in the northern part of Delaware. Today, Fort Christina is called Wilmington. In 1651, the Dutch reclaimed the area and built a fort near present day New Castle. By 1655, the Dutch had forcibly removed the Swedes from the area and reincorporated Delaware into their empire. In 1664, however, the British removed the Dutch from the east coast.

After William Penn was granted the land that became Pennsylvania in 1682, he persuaded the Duke of York to lease him the western shore of Delaware Bay so that his colony could have an outlet to the sea. The Duke agreed and henceforth, Penn's original charter included the northern sections of present-day Delaware, which became known as "The Lower Counties on the Delaware".

The decision by the Duke angered Lord Baltimore, the first proprietary governor of Maryland, who believed he had the rights to it. A lengthy and occasionally violent 100-year conflict between Penn's heirs and Baltimore's heirs was finally settled when Delaware's border was defined in 1750 and when the Maryland/Pennsylvania and Maryland/Delaware borders were defined as part of the Mason-Dixon Line in 1768.

Shortly after the incorporation of the "Lower Counties" into Pennsylvania, the sparsely populated region grew isolated from the bustling city of Philadelphia, and began holding their own legislative assemblies, though they remained subjects of the Pennsylvania governor. It wasn't until 1776, however, that Delaware had a government completely independent from Pennsylvania. In 1787, Delaware became the first colony to ratify the U.S. Constitution, and hence became America's first state.