The village later to be called Ayr, on the Nith River, was originally a group of settlements, Mudge’s Mills in the centre, Jedburgh to the east and Nithvale to the west, that eventually combined into one as they expanded. The name Ayr was first used in 1840 when it was assigned to the post office.
The territory in this area, eventually to be the township of North Dumfries, consisting of 94,305 acres, had been sold to Philip Stedman in 1798 from Joseph Brant of the Six Nations. Ownership transferred to Thomas Clarke and then, in 1816 to William Dickson a wealthy immigrant from Scotland
Absalom Shade was the only individual land owner in the area of the junction of Smith’s Creek (now the Nith River) and Cedar Creek in 1822 and the first actual settler was Abel Mudge, initially as a squatter. He built a dam, a sawmill and a grist mill. The Nith River and Cedar Creek were useful for powering mills. Most subsequent settlers at Mudge’s Mills were Scottish, farmers, artisans or tradesmen.
Jedburgh was founded by John Hall from Scotland in 1832. He built a flour mill and a distillery. Nithvale, was founded during the early 1830s when a flour mill and two sawmills were opened but little information remains from that era. Hall opened a flour mill and a distillery nearby in 1832.
The settlement at Mudge’s Mill was laid out by James Jackson, the first settler, with J. R. Andrews, and Robert Wyllie in 1839. A post office opened in 1836, called Ayr after a town in Scotland. The other two settlements were not a part of Ayr but received their mail at the single post office. The Smith’s Canadian Gazetteer of 1846 describes Ayr, population 230, as containing two churches, a post office receiving mail once a week and businesses such as a grist mill, fulling mill and carding machine, a tannery, two stores, a blacksmith, two shoemakers, two tailors, one cooper and two carpenters.
The largest business in Ayr for many decades was a foundry. In 1849, the John Watson Manufacturing Company (later Ayr Machinery Works) was already making threshing, mowing, reaping and other farm implements. By then, the population was 700 and a newspaper and library were operating. The town-hall was built in 1850. 1850 A large furniture factory also opened at about the same time. There were also five flour mills in the three communities that later formed Ayr, a very large sawmill and a woolen mill by then. Watson’s company was very successful, shipping agricultural implements across the country by 1864. By 1850, a good road to Galt had been built and a railway had reached Galt, some distance from Ayr. During that time, goods for export were taken by ox carts to the train station at Paris, Ontario. The town hall was built in 1850 and a fire department was started the same year.
By 1854, the village had a small library, two school houses, a fire company, a newspaper and a single (Presbyterian) church. In addition to the major farm implements manufacturer, other businesses that were operating in 1864 included grist and saw mills, five flour mills, a woollen mill, stores and a furniture factory. The population was 1000, there were five churches, a fire company, a weekly newspaper and a large school with students from primary to senior level.
The village got a rail line from the Credit Valley Railway in 1879; which helped facilitate the importing and exporting of goods. Jedburg and Nithvale were absorbed into Ayr in 1884 when the village was incorporated, with foundry owner John Watson as the first Reeve.
By 1888, the streets were lit with coal oil lamps and concrete sidewalks were installed in 1901. A large library was built in 1909 with funds provided by a Carnegie grant. Ayr was declining by around 1910 and some of the population moved to nearby Berlin and Preston. Starting in the 1950s and still continuing, new homes were built for commuters helping to increase the population.