First called Sunday River Plantation, it was settled in 1781 by Benjamin Barker and his two brothers from Methuen, Massachusetts, together with Ithiel Smith of Cape Elizabeth. But the settlement was plundered in 1782 by Indians and abandoned. Then John J. Holmes of New Jersey purchased the land in 1794 with his sister's surname on the deed: Bostwick. On June 15, 1805, Bostwick Plantation was renamed by settlers that had come from Newry in what is now Northern Ireland.
The trade route (now Route 26) from Portland to Errol, New Hampshire, completed in 1802, passed through Newry. Farms were established on the intervales, which had excellent soil. Hay was the principal crop. Slopes of the mountains provided pasturage for grazing animals. A sawmill and gristmill were built on the Bear River, and by 1870 the population was 416. Today, Newry is noted as the home of Sunday River ski resort.
There were 142 households out of which 30.3% had children under the age of 18 living with them, 50.0% were married couples living together, 5.6% had a female householder with no husband present, and 36.6% were non-families. 23.9% of all households were made up of individuals and 4.9% had someone living alone who was 65 years of age or older. The average household size was 2.42 and the average family size was 2.96.
In the town the population was spread out with 25.0% under the age of 18, 7.8% from 18 to 24, 25.9% from 25 to 44, 30.5% from 45 to 64, and 10.8% who were 65 years of age or older. The median age was 41 years. For every 100 females there were 108.5 males. For every 100 females age 18 and over, there were 111.5 males.
The median income for a household in the town was $42,321, and the median income for a family was $51,250. Males had a median income of $37,500 versus $19,625 for females. The per capita income for the town was $21,982. About 3.8% of families and 5.0% of the population were below the poverty line, including 2.2% of those under age 18 and 12.5% of those age 65 or over.