Chatham station opened on January 1, 1838 along with other stations on the Morris and Essex Railroad between Orange (at one time the western terminus of the line) and Morristown. During the beginnings of the rail in the area, Chatham was the home of a relatively well-utilised and large rail yard because of the steep grades in the surrounding area. In the early 1900s, the station was mainly used by vacationers from New York City who came to Chatham to experience what was then considered a beautiful town away from the bustling city. A number of hotels on Main Street served this vacation interest.