Milltown was incorporated as a borough by an act of the New Jersey Legislature on January 29, 1889, from portions of North Brunswick, based on the results of a referendum held three days earlier. The borough was reincorporated by resolution of the borough council on May 2, 1896. A portion of East Brunswick Township was annexed in 1902. Originally known as Bergen's Mill, named for Jacob I. Bergen who owned the grist mill, the name is believed to have become "Milltown" from residents "going to the mill in town".