The original Native American inhabitants called the area "Matetacoke" meaning "place without trees."

Growth was slow during Waterbury's first hundred years due to the constant flooding of the Naugatuck River, which discouraged many potential settlers. But the city emerged as an early American industrial power in the early 19th century when it began to harness the waters of the Naugatuck to power early factories.

Throughout the first half of the 20th century, Waterbury had large industrial interests and was the leading center in the United States for the manufacture of brassware, earning it the nickname the "Brass City" and inspiring the city's motto: Quid Aere Perennius? ("What is More Lasting than Brass?").

Holy Land USA is a park in Waterbury most notable for its illuminated cross on the hill that can be seen from both major highways and most points in the city. The original park contained miniature models of Jerusalem and Bethlehem. It was one of Connecticut's biggest tourist attractions in the 1960s and 1970s, with 50,000 visitors per year.

"The Secret Life of Walter Mitty" (1939) is the most famous of James Thurber's stories. It deals with a mild-mannered man who drives into Waterbury with his wife for their weekly shopping trip, during which he has a series of heroic daydreams. First he is the pilot of a U.S. Navy flying boat in a storm, then he is a magnificent surgeon performing a one-of-a-kind surgery, then a deadly assassin testifying in a courtroom, and then a Royal Air Force pilot volunteering for a daring, secret suicide mission to bomb an ammunition dump. As the story ends, Mitty imagines himself facing a firing squad, "inscrutable to the last."

A famous Waterbury product of the late-19th century was Robert H. Ingersoll's one-dollar pocket watch, which sold five million copies. After this, the clock industry became as important as Waterbury's brass industry. Evidence of these industries can still be seen in Waterbury, as numerous clocktowers and old brass factories have become landmarks of the city.

The Waterbury Clock Company produced the Mickey Mouse watch in 1933 under the Ingersoll brand. The watch was so popular that over 11,000 were sold the first day alone, saving the company from bankruptcy.

Closed at both ends and dotted with ruins of former homes, Downs Road is the setting for several local ghost stories. Among them are the Downs Road Monster, which some say was actually an albino horse, along with various ghostly apparitions and strange creatures such as Melon Heads, rumored to leave claw marks on cars parked in the area.

Happy Gilmore (1996) stars Adam Sandler as an unsuccessful ice hockey player who discovers a newfound talent for golf, which he displays at the "Waterbury Open".

On April 15, 1912 Waterbury's Rev. Roger Anderson was a passenger on the ship, Carpathia, that rescued survivors of the Titanic. He gave a memorial service over the exact location where the Titanic had just gone down and later gave a burial service at sea for three crew members and a passenger who died of their injuries while on the Carpathia.