Human beings probably inhabited the area of Rehoboth Beach as long ago as 10,000 BC; little is known about them because much of the evidence of their existence has been destroyed by development. At that time, sea levels were lower, and the Atlantic Coast lay about 30 miles (48 km) farther east than it does today. At the time, the area would have resembled inland portions of southern Delaware today.
By the time the first Europeans arrived in the area in the 17th century, the coastline was at its present location and several Native American tribes lived in the area, including the Lenape (or Delaware), the Sikkonese, the Assateagues, and the Nanticoke. Pressure from English and Dutch settlers radiating outward from Delaware forced the Lenape to migrate to upper New York state, Canada, and Oklahoma, while the Sikkonese and Assateagues were extirpated; the Nanticoke, however, still exist in the general area today.
The land later came under the control of the Duke of York, who granted it to various landholders in the 18th century. By the mid-19th century, the descendants of these landholders were farmers attempting to make a living off the relatively poor land. The city was founded in 1873 as the Rehoboth Beach Camp Meeting Association by the Rev. Robert W. Todd, of St. Paul's Methodist Episcopal Church of Wilmington, Delaware, as a site for Methodist camp meetings in the spirit of similar resorts on the New Jersey shore, such as Ocean Grove. The Camp Meeting Association disbanded in 1881, and in 1891, the location was incorporated by the Delaware General Assembly as "Henlopen City", shortly after which it was renamed to Rehoboth Beach.