Montgomery was incorporated as a borough by the Pennsylvania State Legislature on March 27, 1887 from part of Clinton Township. The history of the settlement of Montgomery begins in 1783 when John Lawson established a homestead there. Nicholas Shaffer built a gristmill in Montgomery in 1795. A sawmill and a wool carding mill were other early industries found on Black Hole Creek which flows through Montgomery.
Today, Black Hole Creek is a great place for local anglers to fish for trout. Those looking for small mouth bass and perch can just follow the creek to where it meets the Susquehanna River. Camping is readily accessible in town with a local private campground that abuts the Susquehanna River. The Montgomery Area Genealogical Society is dedicated to preserving the documents and heritage of the surrounding area. Housed in the Montgomery Library, the society has a large research collection open to the public.