What is now the village of Ayr, then consisting of three small settlements, was first settled in 1822 by Abel Mudge, initially as a squatter. He built a dam, a sawmill and a grist mill at the junction of Smith and Cedar Creek. A post office opened at the settlement called Mudge's Mills in 1840, with the name Ayr, named after a town in Scotland. The other two settlements, Jedburgh to the east and Nithvale to the west, were not yet a part of Ayr but received their mail at the single post office. The population in 1846 was 230 persons, working in businesses such as a grist mill, barrel making, carpentry, wool processing, blacksmithing, tanning hides, making shoes and clothing, or carpentry. The population of Ayr did not reach 1000 until almost 1870. The largest business was a foundry.