The town of Berlin had its start around the 1790s, part of the Burley Plantation, a 300-acre land grant dating back to 1677. The name Berlin is believed to be derived from a contraction of "Burleigh Inn", a tavern located at the crossroads of the Philadelphia Post Road (now South Main Street) and Sinepuxent Road (Tripoli Street).
Berlin incorporated as a town in 1868. Since the late 1980s, the town has undergone considerable revitalization of its historic downtown commercial district and adjacent residential areas. Berlin's historic residential areas feature nearly two centuries of architectural heritage from three distinct periods: Federal, Victorian, and 20th Century. Forty-seven of these structures have been noted in the National Register of Historic Places and the Berlin Commercial District. Berlin has also been designated as a "Main Street Community" by the State of Maryland in recognition of its revitalization progress. Berlin was recently named "America's Coolest Small Town."
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