Abenaki Indians called it Pannawambskek, meaning "where the ledges spread out." The French established a mission here in the 1680s, although it would be settled by English settlers in 1774. The name Old Town derives from Indian Old Town, which was the English name for the largest Penobscot Indian village -- Indian Island. Located in Old Town via bridge, the reservation is the current and historical home of the Penobscot Nation.
In 1840, when the present city was set off from neighboring Orono (named for a Penobscot sachem), it was given the name Old Town because it contained the Penobscot village. Over time, the Penobscot village ceased to be called Old Town and the name migrated to the much newer American settlement across the river.
Old Town may be best known for Old Town Canoe, a major manufacturer of canoes and kayaks, which has been based in Old Town for over 100 years. Its location along a series of drops in the Penobscot River near the head of tide just downstream in Bangor made it an ideal location in the 1800s for sawing lumber from the millions of board feet of spruce and pine logs floated annually down the Penobscot.
Many of the residents work for the University of Maine in Orono and Eastern Maine Medical Center in Bangor, the two largest employers in the area. Old Town is also home to a former Georgia-Pacific paper mill that is being redeveloped.
The city of Old Town includes Treat-Webster Island, a.k.a French Island, a predominantly residential neighborhood located on a small island in the middle of the Penobscot River. French Island is the intermediate land mass between Milford, and Old Town and is connected on either side by bridge.
According to the United States Census Bureau, the city has a total area of 42.7 square miles (110.5 km²), of which, 38.3 square miles (99.2 km²) of it is land and 4.4 square miles (11.3 km²) of it (10.24%) is water. With its business district located on an island, Old Town is drained by the Stillwater River and Penobscot River.
The city is crossed by Interstate 95, U. S. Route 2 and 2A, and state routes 16, 43 and 116. It borders the towns of Orono to the south, Glenburn to the west, Hudson to the northwest, Alton and Argyle Township to the north, and (separated by water) is near Milford east, and Bradley to the southeast.
As of the census of 2000, there were 8,130 people, 3,426 households, and 1,993 families residing in the city. The population density was 212.3 people per square mile (82.0/km²). There were 3,686 housing units at an average density of 96.3/sq mi (37.2/km²). The racial makeup of the city was 94.62% White, 0.65% African American, 1.48% Native American, 1.83% Asian, 0.04% Pacific Islander, 0.28% from other races, and 1.09% from two or more races. Hispanic or Latino of any race were 0.52% of the population.
There were 3,426 households out of which 26.1% had children under the age of 18 living with them, 44.7% were married couples living together, 10.1% had a female householder with no husband present, and 41.8% were non-families. 29.1% of all households were made up of individuals and 11.7% had someone living alone who was 65 years of age or older. The average household size was 2.30 and the average family size was 2.83.
In the city the population was spread out with 20.0% under the age of 18, 18.3% from 18 to 24, 27.0% from 25 to 44, 20.8% from 45 to 64, and 13.9% who were 65 years of age or older. The median age was 34 years. For every 100 females there were 91.2 males. For every 100 females age 18 and over, there were 90.8 males.
The median income for a household in the city was $29,886, and the median income for a family was $40,589. Males had a median income of $32,961 versus $23,723 for females. The per capita income for the city was $16,100. About 11.8% of families and 18.6% of the population were below the poverty line, including 14.6% of those under age 18 and 14.6% of those age 65 or over.