The first navigable canal in the United States was opened to traffic in 1795, making Falls Village, then the South Hadley Canal.  The canal served as a shipping center and a tourist attraction. The canal was later deepened and locks replaced the carriages that carried flatboats and rafts between lower and upper levels of the canal. Steamboats were introduced to the canal in 1826 and in 1862, a railroad was built, which replaced the river as a way of shipping goods.

In 1897, South Hadley established "the South Hadley Public Library", one location in the center of town and one on the Falls. The library employed nine trustees, which were voted $1000 a year. The Gaylord Memorial Library was established at the center of town in 1904. Three years later, the South Hadley Falls Free Public Library was opened in the Carnegie Hall Foundation Building when Miss Elizabeth Gaylord donated land and furnishings to the town.

In 1908, the combined High School and Town Hall were opened in the present Town Hall and the limited or representative town meeting was adopted by referendum in 1933. One year later, at the first town meeting , 54 members of the first town meeting were elected. The Senior High School was opened on Newton Street and then enlarged in 1964.