In the American Revolutionary War, settlements throughout the Susquehanna valley and what was to become Loyalsock Township were attacked by Loyalists and Native Americans allied with the British. After the Wyoming Valley battle and massacre in the summer of 1778 (near what is now Wilkes-Barre) and smaller local attacks, the "Big Runaway" occurred throughout the West Branch Susquehanna valley. Settlers fled feared and actual attacks by the British and their allies. Homes and fields were abandoned, with livestock driven along and a few possessions floated on rafts on the river east to Muncy, then further south to Sunbury. The abandoned property was burnt by the attackers. Some settlers soon returned, only to flee again in the summer of 1779 in the "Little Runaway". Sullivan's Expedition helped stabilize the area and encouraged resettlement, which continued after the war.
Isaac and William McKinney, father and son, built the McKinney Iron Works along Lycoming Creek in western Loyalsock Townshop between 1825 and 1830, when they built a forge, in an area known as Heshbon Park. Their operation was expanded in 1836 with the construction of an iron furnace and further still in 1841 when a rolling mill was added to the complex. Iron ore was transported down the West Branch Susquehanna River Valley and up Lycoming Creek to the iron works from Centre County. The McKinney's effort was ultimately unsuccessful. The efforts of two more iron masters also failed. The iron works was largely destroyed by a flood in 1865.
Daniel Hughes was a conductor in the Underground Railroad based in Loyalsock Township. He was the owner of a barge on the Pennsylvania Canal and transported lumber from Williamsport on the West Branch Susquehanna River to Havre de Grace, Maryland. Hughes hid runaway slaves in the hold of his barge on his return trip up the Susquehanna River to Lycoming County where he provided shelter on his property near the Loyalsock Township border with Williamsport before moving further north and to eventual freedom in Canada. Hughes' home was located in a hollow or small valley in the mountains just north of Williamsport. This hollow is now known as Freedom Road having previously been called Nigger Hollow. In response to the actions of concerned African American citizens of Williamsport, the pejorative name was formally changed by the Williamsport City Council in 1936..
Today a great part of Loyalsock Township is part of the Williamsport Metropolitan area. The flood plain between Williamsport and Montoursville is densely populated with family homes and a shopping district known as the "Golden Strip" along East Fourth Street. The northern and western parts of the township are less heavily populated but still there are many family homes and small businesses. The population of Loyalsock Township has grown to 10,876 (2000 census) this is up from 2,498 (1890 census).
According to the United States Census Bureau, the township has a total area of 21.2 square miles (55.0 km²).21.0 square miles (54.4 km²) of it is land and 0.2 square miles (0.6 km²) of it (1.13%) is water.
There were 4,501 households out of which 26.1% had children under the age of 18 living with them, 53.5% were married couples living together, 9.5% had a female householder with no husband present, and 34.1% were non-families. 31.0% of all households were made up of individuals and 18.9% had someone living alone who was 65 years of age or older. The average household size was 2.25 and the average family size was 2.80.
In the township the population was spread out with 20.7% under the age of 18, 5.0% from 18 to 24, 20.7% from 25 to 44, 24.3% from 45 to 64, and 29.4% who were 65 years of age or older. The median age was 47 years. For every 100 females there were 81.6 males. For every 100 females age 18 and over, there were 76.0 males.
The median income for a household in the township was $36,806, and the median income for a family was $47,952. Males had a median income of $39,623 versus $24,684 for females. The per capita income for the township was $23,480. About 6.8% of families and 8.7% of the population were below the poverty line, including 15.7% of those under age 18 and 4.3% of those age 65 or over.
A Lancer is the mascot for the school district. The school colors are maroon and white.