The first European settler in the area that was to become Mexico, Maine was Isaac Gleason. He wasn't the first to come, as others had come before him, remaining a while to cut the larger trees, then returning to their homes, finding the climate to be unbearable in the winter. After Gleason settled, six other families moved in, around 1780, settling into a hard life with few possessions and no money. The names of these seven families are on the oldest petition found regarding the town of Mexico, in which they addressed the Senate and the House of Representatives asking to be exempted from taxation as they did not have the means in which to pay it.
At first the settlement was known as Holmanstown Plantation, who had purchased the land containing it in 1789. In June of 1803, Dixfield split off and became incorporated, while the remainder of the area retained the name of Holmanstown until February 13, 1818, when it incorporated as Mexico.
The early settlers were, for the most part, descendants of the Pilgrims and Puritans. Church meetings were held in proviate homes during the winter months, and in barns and fields during the summer. However, at the second meeting of the newly formed town of Mexico, on April 16, 1818, it was determined to build a schoolhouse. Once constructed, both the town meetings and Sunday church services were held at the school house.
As the town developed, most of the industry was to remain across the Swift River in Rumford, Mexico was home to many of those who worked in the Rumford paper mills.