Palermo, Maine is located in Waldo County. The area was settled in 1778, and incorporated as a town on June 23, 1804 from Great Pond Plantation. Although primarily agricultural in its early days, today the town is a bedroom community, located equidistant between Augusta, Waterville, and Belfast. There is no industry and no storefront businesses, although the town does have a post office, volunteer fire department, town office, and consolidated school. Its natural resources include Sheepscot Lake, a 1,500-acre lake fed by the Sheepscot River.