At the time of the arrival of the Europeans in the 17th century, the area around the bay was inhabited by the Lenni-Lenape. The Indian name for the bay was Poutaxat. The river they called Lenape Wihittuck, which means "the rapid stream of the Lenape." The first recorded European visit to the bay was by Henry Hudson in 1609 sailing for the Dutch. In the 1620s, the Dutch placed a small number of colonists on the east side of the bay, naming it the Zuyd (South) River of the New Netherland colony. In 1630, they established an equally short-lived whaling station on the western shore, near present-day Lewes. The Dutch hold on the South River was therefore very weak, and in 1637, the Swedish established their own colony, New Sweden, well upriver from the earlier Dutch locations. However, once the Dutch strengthened the center of their colony along the Noort (North, later Hudson) River, they invaded New Sweden and regained control of the South River in 1655.
Unfortunately for the Dutch, the middle of the 17th century saw a series of wars with the British, disputing trading stations and colonies around the globe. The final settlement, in 1674, left the British in control of the area, the bay, the river, and the Indian tribe were all renamed after Lord Delaware (Thomas West, Baron De La Warr), an Englishman who led the contingent which reinforced the Jamestown settlement in 1610. Charles II gave all the territory of New Netherland to his brother, the Duke of York (later James II). James sold the eastern side of the Delaware to his friends, Lord Berkeley and Sir George Carteret, who named their new colony New Jersey. Unsuccessful in developing the colony, Carteret sold his portion, known as West Jersey, in 1677 to a group of Quakers which included William Penn. In 1681, Charles II granted William Penn a colony on the western side of the river, which the king named Pennsylvania in honor of Admiral Penn, William’s father. When it was pointed out that this grant overlapped part of the Duke of York’s lands, the king protected his brother by establishing a twelve-mile circle from the courthouse in New Castle to separate the Duke’s lands from Pennsylvania. Realizing that he needed to ensure his colony’s access to the sea, Penn leased the Duke of York’s three counties on the lower Delaware in 1682.
During these various changes in ownership and control, previous colonists were confirmed in their lands, and the guarantee of religious freedom in Pennsylvania and West Jersey created a welcoming climate for new immigrants. With the Native Americans who remained in the area, the Delaware Valley developed a strikingly diverse population, including Dutch, Swedes, Finns, Africans (both free and as slaves), Germans, Bohemians, French, Swiss, Welsh, Irish, Scots, and English, who held widely varying religious beliefs, including Quakers, Anabaptists, Mennonites, Huguenots, Catholics, and Jews. The area was quickly settled, leading to the growth of Philadelphia upriver on the Delaware as the largest city in North America in the 18th century.
The strategic importance of the bay was noticed by the Marquis de Lafayette during the American Revolutionary War, who proposed the use of Pea Patch Island at the head of the bay for a defensive fortification to protect the important ports Philadelphia and New Castle, Delaware. The War of 1812 saw the first earthenwork fort on this island, for the same reason. Several naval battles were fought between British and American vessels in the bay and river, and in 1813, Lewes was bombarded by the British over two days. This engagement saw the first use of rockets in warfare by the British fleet. The initial fort was replaced by a masonry fort in 1821, which later burned. The present fort, Fort Delaware, was begun in 1848 and completed in 1859, just in time for the American Civil War, when the island became a Union prison camp.
The federal government also recognized the commercial importance of the Delaware Bay early on, with the need to protect the many ships that sailed in and out of the very dangerous mouth of the bay every year. In 1828, the construction of the first breakwater, designed by William Strickland, a noted architect and engineer of the new republic, began at Lewes. The Breakwater Harbor was the first of its kind in the Western Hemisphere, and only the third one in the world. In the 1840s, 25 vessels a day harbored here, and it was quickly apparent that the harbor was too small. Additions and improvement were made throughout the rest of the century, but the full National Harbor of Refuge was not completed until 1901. The harbor had associated with it a Lifesaving Station, to rescue survivors of shipwrecks, and a Quarantine Station, to isolate cases of sickness among incoming ships and protect the populations of the Delaware river and bay from infectious diseases.
With changes in technology, ships became steam-powered, metal-hulled, and larger. In 1885, the United States government systematically undertook the formation of a 26-ft. channel 600 ft. wide from Philadelphia to deep water in Delaware Bay. The River and Harbor Act of 1899 provided for a 30-foot channel 600 feet wide from Philadelphia to the deep water of the bay. The bay today is still one of the most important navigational channels in the United States, and is the second busiest waterway in the United States after the Mississippi River. Its lower course forms part of the Intracoastal Waterway.