Although formally established as a Township in 1692, Middletown Township was well-established ten years earlier, when William Penn and his surveyor, General Thomas Holme, laid out the City of Philadelphia. 

In 1692, Bucks County was divided into five townships: Middletown, Makefield (now Upper and Lower Makefield); Buckingham (now Bristol Borough and Bristol Township), Falls, and Salem (now Bensalem). Because this township was in the middle of the five townships, Middletown became its name.

The early settlers were Swedes, Dutch, English, Welsh, Quakers, Germans, Scots and Irish immigrants. The Swedes and Dutch were the first to settle in the area since the Delaware Valley climate closely resembled that of their native countries.

Until the late 1800s, Middletown included the boroughs of Penndel, Hulmeville, Langhorne, and Langhorne Manor, when these entities split from the Township.

Early settlements in Langhorne Terrace and Parkland, because of their proximity to the Neshaminy Creek, were developed as communities of summer homes. Other communities grew along transportation routes. The largest urban development in the Township during the early 1700's was Attleboro (now Langhorne) that developed along the rail line.

Most of Middletown remained a farming community until the latter part of the 1800s. Because the rail line stopped in Langhorne, Woodbourne, and Glen Lake, and automobiles made transportation easier, Philadelphians began migrating from the city for the rural farmlands. Of course, the largest explosion of housing in the Township came in the late 1950's when William Levitt built Levittown.

The Township is also the home of approximately 120 historically significant sites, including the Beechwood Manor home on the Woods Schools property, the "Wistar House" on New Falls Road, and the Wildman House on Langhorne-Yardley Road, a stop for runaway slaves fleeing north to freedom on the Underground railroad.

Since the 1950s, Middletown Township has grown in terms of residential housing and commercial development. The county's largest mall, Oxford Valley, is located in Middletown. Recreational sites such as Sesame Place amusement park are in Middletown Township.