The land along the west bank of the Beaver River just below the falls upon which Fallston now stands was the scene of considerable Indian activity before the establishment of Beaver County. This was due to the path west of the borough which ran to the great Indian village at Sandusky. With the encroachment of the whites, Captain Sam Brady's rangers from Fort McIntosh also utilized this trail. With the establishment of Beaver County in 1800, the land became part of South Beaver Township. That year, David Townsend erected a sawmill on the site, and in 1804, the Pugh family built a flour mill. In 1805, the land became part of Ohio Township, and in 1816, it passed into the newly formed Brighton Township. During these years, industry grew as settlers harnessed the power of the river.
In 1829, the Borough of Fallston and the Fallston post office were established. By 1837, Harris' Pittsburgh Business Directory reported that the borough contained "upwards of 1000 inhabitants; who are principally engaged in the various manufacturing operations, carried on by means of the immensely important water power here possessed. The construction of the race, by an incorporated water company, enabled them to avail themselves of the water of the Beaver to its full extent." Harris listed two sawmills, an oil mill, a sash factory, a wire manufactory ("one of the most complete and operative establishments of the kind in the Union"), paper, woolen and flour mills, and a machinist's shop as among Fallston's industries. A young boy who visited the borough about this time "found recreation in rowing a skiff on Beaver River, in fishing above the dam, and in catching turtles below it in the numerous holes worn by the action of the river."
In 1843, Sherman Day's Historical Collections of Pennsylvania stated that Fallston "is situated along one or two streets, at the foot of a high bluff." Day described much the same industries as Harris had, and attributed them to the same source, the "immense" water power protected by "a race . . . permanently constructed a mile and a half in length, which conducts the water upon which a long row of manufacturing establishments is erected," Day placed Fallston's population at 843. Some of the industries, however, began to fail. James Patterson, in a county history included in the 1876 Beaver County Directory, notes that while the wire works were then still operating, the bucket factory was "dead," and the woolen factories' business was largely ruined. The population in 1870 had decreased to 629.
At the turn of the century, Bausman reported that "nearly all the minor industries of the early period referred to by Harris have disappeared, giving place to the large and important works of the Townsends and Kennedys," and that "the power house of the Valley Electric Company" was located in the borough. Clay deposits in the vicinity led to the manufacture of brick in Brady's Run Valley.
Today, the brickyards are gone, the Townsend buildings are used for storage, and the mill race is dry. A foundry remains as the community's main industry. The Beaver Valley Yacht club along the river reflects the massive trend to recreational boating. Fallston is included in the New Brighton Area School District.