Blue Hill, Maine was incorporated on February 2, 1789 from Blue Hill Bay Plantation. In 1831, the town annexed land from Sedgwick; and, in 1845, ceded land to the town of Penobscot.
Settled in 1762, its name was derived from Blue Hill, just north of the town's main settlement, which has an altitude 940 feet. Blue Hill Falls and East Blue Hill are other settlements within the town.