Stillwater was settled in the eighteenth century by Palatine German immigrants who entered through the port of Philadelphia. In 1741, Casper Shafer, John George Wintermute (Windemuth), and their father-in-law Johan Peter Bernhardt settled along the Paulins Kill. For the next 50 years, the village of Stillwater was essentially German, centered on a union church shared by Lutheran and German Reformed (Calvinist) congregations. The German population assimilated by the early nineteenth century, but evidence of their settlement remains in the architecture of the grist mills, lime kilns, and stone houses located throughout the valley. Stillwater was incorporated as a township by an act of the New Jersey Legislature on December 27, 1824, from portions of Hardwick Township when Sussex County was divided in half by the legislature a few weeks earlier to create Warren County. Portions of the township were taken to form Fredon Township on February 24, 1904.