The first settlers arrived around 1759. The town was founded in 1772 as "Kings District". The name was changed to "Canaan" in 1788. One of the oldest sections of Canaan is Frisbie Street, settled in 1770 by Gideon Frisbie, an immigrant from Canaan, Connecticut.<ref>Pg. 1 – "Most Likely To Succeed" – Alan Gelb 1990 Template:ISBN</ref> Frisbie Street fronts what was once the Albany-Bostonstagecoach route.
At approximately 1 p.m. (EDT) on August 28, 1973, an F4 tornado touched down in Canaan and moved in a south-southeast direction across the Massachusetts state line into the town of West Stockbridge, Massachusetts. It caused significant damage to the Berkshire Farm for Boys in Canaan then “obliterated” nearly every house in its path in West Stockbridge. Finally, it leveled the Berkshire Truck Stop on Massachusetts Route 102 near the Massachusetts Turnpike, overturning and throwing trucks and cars and ripping gas pumps out of their stands. When it was over, four people had been killed (including three at the truck stop), 36 were injured, and approximately $25 million ($148 million, 2021 USD) in damage had been done.
There were 643 households, out of which 27.1% had children under the age of 18 living with them, 55.5% were married couples living together, 5.4% had a female householder with no husband present, and 35.5% were non-families. 28.6% of all households were made up of individuals, and 11.7% had someone living alone who was 65 years of age or older. The average household size was 2.34 and the average family size was 2.88.
In the town, the population was spread out, with 34.2% under the age of 18, 4.3% from 18 to 24, 20.9% from 25 to 44, 26.5% from 45 to 64, and 14.0% who were 65 years of age or older. The median age was 38 years. For every 100 females, there were 137.3 males. For every 100 females age 18 and over, there were 103.2 males.
The median income for a household in the town was $51,607, and the median income for a family was $62,656. Males had a median income of $44,063 versus $37,083 for females. The per capita income for the town was $28,209. About 2.7% of families and 5.1% of the population were below the poverty line, including 4.1% of those under age 18 and 5.4% of those age 65 or over.
Canaan – The hamlet of Canaan is in the north-central part of the town at the junction of New York State Route 295 and County Road 5. It was formerly "Canaan Corners".
Canaan Center – A hamlet south of Canaan village on Route 5, just south of the geographic center of the town.
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