Historically, manufacturing was Catasauqua's principal industry, and, in 1839, it was the location of the first manufactured anthracite iron in the nation. Catasauqua's population in 1910 was 5,250. The population was 6,588 at the 2000 census. The word Catasauqua is shortened to "Catty" in local dialect when speaking of the place.
According to the United States Census Bureau, the borough has a total area of 1.3 square miles (3.4 km²), of which, 1.3 square miles (3.3 km²) of it is land and 0.04 square miles (0.1 km²) of it (2.31%) is water.
There were 2,616 households out of which 33.6% had children under the age of 18 living with them, 49.5% were married couples living together, 12.1% had a female householder with no husband present, and 33.1% were non-families. 27.6% of all households were made up of individuals and 10.8% had someone living alone who was 65 years of age or older. The average household size was 2.50 and the average family size was 3.04.
In the borough the population was spread out with 25.0% under the age of 18, 7.7% from 18 to 24, 32.1% from 25 to 44, 22.3% from 45 to 64, and 12.9% who were 65 years of age or older. The median age was 36 years. For every 100 females there were 94.1 males. For every 100 females age 18 and over, there were 91.1 males.
The median income for a household in the borough was $42,432, and the median income for a family was $48,589. Males had a median income of $32,320 versus $45,730 for females. The per capita income for the borough was $18,906. About 5.4% of families and 8.0% of the population were below the poverty line, including 11.7% of those under age 18 and 11.2% of those age 65 or over.
In 1840, the anthracite iron industry was founded in what is now known as Catasauqua, originally Biery's Port, making it a birthplace of the Industrial Revolution in the United States. Welsh immigrant David Thomas relocated to the area and opened the Crane Iron Works. Remembered as "the father of Catasauqua," Thomas initially named the community Craneville, after his former employer in Wales.
The wealthy, generous Thomases were responsible for many sweeping changes to the prosperity of the community. David Thomas founded the Presbyterian Church of Catasauqua, in which residents still worship today, and his wife Elizabeth donated money and land to found the Welsh Congregational Church, which no longer exists. Thomas organized Catasauqua's first fire company, installed its first public water system, and served as its first burgess.
In 1854, the town was formally titled Catasauqua (pronounced "Cat-uh-SAW-kwuh"), from the Lenni Lenape language, meaning "dry ground" or "thirsty ground."
Catasauqua is home to two different neighborhoods listed on the National Register of Historic Places. One is Biery's Port, located along the Lehigh River and named for an early family of prominence; the other is known as "the mansion district," and comprises Victorian homes once owned by wealthy residents.
By 1900, Catasauqua boasted 5,000 residents, and had the highest percentage of self-made millionaires of any town in the United States.
In 1917, while many of the young men of the town served in World War I, Catasauqua became the first community in the United States to raise $1 million in war bonds, earning it the nickname "The Million Dollar Town."
Catasauqua observed its 150th anniversary of incorporation in 2004.