When Leonard Calvert and his original colonists arrived in what is now Maryland in March of 1634, they immediately set about establishing civil boundaries as they had known them in England. The seat of the first county was set up at the town site of the Ybocomico Indians. The county seat and the county itself were named St. Mary's, in honor of Mary the Mother of Jesus, under whose protection the Maryland venture was placed. From 1634 to 1708, court proceedings were conducted in the homes of various gentlemen of note in the town.

In 1708, Phillip Lynes, the mayor of St. Mary's City, gave the colony fifty acres of a piece of land known as "Shepherd's Old Fields" at the head of Breton Bay, some 14 miles northwest of the city. The land was to be divided into 100 lots and laid out as the county seat of St. Mary's County. Seven commissioners were charged by the Governor and Assembly of Maryland to oversee this endeavor, which included building a county courthouse on one of the lots at an expense not to exceed 12,000 pounds of tobacco. At the suggestion of Mr. Lynes, the town was named Seymour Town in honor of the royal Governor John Seymour.

In 1728, a new set of commissioners appointed by the government in Annapolis renamed the town Leonardtown for the then Governor of Maryland, Benedict Leonard Calvert. Leonardtown continued to serve as the county seat of St Mary's County and the place where the colony conducted its official business for the citizens of the county. A new brick courthouse was built in 1736, the original 1708 log building having fallen almost into ruins.

Leonardtown has been invaded twice. The British invaded during the war of 1812 and made off with food supplies. Then, during the Civil War, a Union naval contingent came ashore and searched the houses for weapons and supplies that might be intended for shipment to Confederate forces.

Leonardtown functioned as a port from colonial times up through the end of the steamboat era, when better roads and trucking usurped river navigation as the preferred mode of transporting goods. But the original purpose for which Leonardtown was established to serve as a center of commerce, residence, and government has continued with distinction throughout the town's three centuries of existence.