Varying cultures of Native Americans lived in this area. The first known settlement in the area which would be known as Coatesville was a historic Lenape village built along the West Branch of the Brandywine River. This settlement was a post for fur trading with the earliest American settlers. The Brandywine River has featured prominently in the history of Coatesville.

William Fleming, originally from Scotland, is one of the earliest landowners on record. That he built a log cabin in the region of Harmony Street and 5th Avenue and owned about 207 acres (0. 84 km2) of land bordering the Brandywine River.

Moses Coates, a prosperous farmer and the namesake of Coatesville, bought the cabin from Fleming’s son in 1787. With the economy rising in the years after the United States gained independence, Moses Coates’ son-in-law, Jesse Kersey, came up with a plan to produce the area by selling frontage on the recently completed Lancaster Turnpike which crossed through their land. The Lancaster Turnpike was the very first toll road in the U. S., authorized in 1792 and completed in 1795. A tollgate was located within the present-day Coatesville city limits. Because Coatesville was located roughly halfway between Philadelphia and Lancaster on the turnpike, it became a popular stopping place.

Pierre Bizallion, a French fur trader, settled in the area in the early 18th century. He was believed to serve as an interpreter between William Penn and Indigenous American peoples. The Veterans Administration Hospital now occupies a large piece of the roughly 500 acres (2. 0 km2) of land which was once owned by Bizallion.