On July 25, 1837, Daniel Webster spoke to a large gathering of Whigs on the Rochester courthouse steps concerning currency regulation and the state of the economy. The Rochester Democrat editorialized that he was "the cleverest fellow in the world for embellishing a story." The Whig farmers from North Penfield, who were part of Daniel Webster's audience that day, were so impressed by his eloquence that, when they petitioned the state legislature for separate town status from Penfield, they chose to name it in his honor. 

On February 6, 1840, Governor William Seward announced the birth of Webster, New York. Originally part of North Penfield, land was split off to create the new town. Residents numbering 2,235 inhabited the new Webster. The first town meeting was held at John Lett's tavern, south of the present village. Attendees discussed town needs and elected officials necessary to meet those needs.