Two essentials — shelter and food — dominated the lives of the approximately 14,000 white settlers who lived in the Massachusetts Bay Colony in 1640. In order to build homes and grow crops, they needed tools. However, in the early years, every single tool — every axe, shovel, and saw — had to be imported. When the Great Migration of the 1630s ended, the number of ships bound for Massachusetts fell off steeply. The supply of iron products went down and the price went up.

Among the men interested in seeing an iron industry develop in the colony was John Winthrop, Jr., son of Governor John Winthrop. Winthrop Jr. (1606–1676) was a man of extraordinary energy and many talents. Educated at Trinity College in Dublin, he trained for the law; he was also drawn to the sciences, including medicine and metallurgy. The younger Winthrop arrived in Massachusetts in 1631; two years later, he helped to found the town of Ipswich. He traveled widely and was involved in many projects, among them the production of iron.

In 1641 he returned to England to find investors for an iron works in the colonies. The result was the Company of Undertakers of the Iron Works in New England, formed in 1643. The company's first venture was in Braintree. It failed almost immediately, and Winthrop was replaced; the new manager decided on present-day Saugus as a better location for an iron works.

Situated on 600 acres of land, the site he chose was bordered by the Saugus River, which was both a source of waterpower and a means of transportation. Woodlands and raw materials, such as bog iron, were nearby.

Hammersmith Iron Works, as it was known, produced 175 tons of iron a year. Some products, such as cooking pots, weights, and fire backs were formed from cast iron right in the furnace area. Most of the cast iron, however, moved on to the forge. There, workers converted it into more malleable and stronger wrought iron bars, which could be used to make tools and building materials, such as nails.

John Winthrop had recruited a group of experienced English workmen and paid for them to accompany him back to Massachusetts, but it proved difficult to attract skilled workers to the Hammersmith Iron Works. Unskilled labor was not as hard to come by. Some landless men preferred working in a forge to the other jobs available to them— or to prison. In 1651 some 60 Scotsmen taken prisoner during the English Civil War were given the choice of languishing behind bars or being shipped to Massachusetts. Company books show 35 employed in the iron works in 1653.

Skilled laborers were paid reasonably well and provided with housing. When their contracts expired, they were in a strong bargaining position. If their terms were not met, they quit, creating vacancies that were difficult to fill. The forges they established when they left Saugus became the foundation of the American iron industry.

After only 22 years, the high cost of labor, combined with mismanagement, forced the Hammersmith Iron Works to close. The last recorded use of the furnace was in 1668. The land was sold; buildings crumbled or were torn down. In the 1680s, a man named Samuel Appleton occupied what had been the company agent's house. Other homes went up, the river silted in, and a road was built right on the site of the iron works. The only visible evidence of the historic enterprise was the pile of slag, as the refuse left after the smelting process was called.

In 1915 the Appleton house was restored, and in the 1940s, word spread among Saugus residents that Henry Ford wanted to buy it and move it to his living history museum in Michigan. The townspeople rallied and raised the money to buy the only remaining seventeenth-century structure in town themselves. In 1943 they formed the First Iron Works Association and embarked on one of the earliest preservation projects in New England. The Association bought and cleared adjacent lots in order to re-create what once stood there and successfully petitioned the town to reroute Central Street so that excavation could begin.

Twenty-one feet below the street, archaeologists found a large section of an original waterwheel. In the first year alone, they unearthed three tons of artifacts, many of which are now displayed in a museum on the site. The foundations of three major buildings were also uncovered. With funding from the Iron and Steel Institute, historians and civil engineers delved into colonial documents and collected information about seventeenth-century iron works in England. The result was a re-creation of the Hammersmith Iron Works. Re-named the Saugus Iron Works, it opened to the public in 1954.

The preservation of the property as the site of the first successful, if short-lived, iron works in the colonies was ensured in 1968 when it was acquired by the National Park Service.