The first settlers arrived in the Chatham area in 1816. The village of Chatham received its name October 22, 1836.
Chatham is located in what was once open prairie between Lick Creek and Panther Creek in Sangamon County, which at that time was about the center of the new state of Illinois, approximately ten miles south of Springfield.
Farmers and their families settled Chatham. Splendid fields of corn, almost without exception from ten to fifteen feet high sprang up over the area. The high degree of fruitfulness attracted many to settle here, even considering the risk and danger of Indians.
The lives of many Chatham people were interwoven with Abraham Lincoln. In 1837, two state senators and seven representatives from Sangamon County managed to convince the General Assembly to move the State Capitol from Vandalia to Springfield. These legislators called the "Long Nine", included Lincoln and John Dawson. Lincoln was a good friend of Rev. Josiah Porter, minister of the Chatham Presbyterian church. Dr. John Lewis, of Chatham, and Lincoln surveyed and purchased rights to build the railroad from Springfield through Chatham to St. Louis.
In order to secure the move of the Capitol to Springfield, the town donated land (no less than two acres) and had to pledge $50,000 to commence building the State House. For a small town of 1100 at the time, this proved to be a struggle. Money was borrowed from the State Bank of Illinois. A note for the amount was signed by one hundred local citizens and deposited in the bank to pay the last installment of the loan