Before the invention of the sawmill, boards were made in a variety of manual ways, either riveted (split) and planed, chipped, or more often hand-cut by two men with a whip in a saw pit, one above and one below. The oldest known mechanical mill is the Hierapolis sawmill, a Roman water-powered stone mill in Hierapolis, Asia Minor3. century is dated. Other water-driven mills followed, and by the 11th century it became common in Spain and North Africa, the Middle East and Central Asia, and spread to Europe over the next few centuries. The circular motion of the wheel was converted into back and forth motion in the saw blade. In general, only the saw was powered and the logs had to be loaded and transported manually. An early development was the development of a water-powered movable trolley to regularly move the log from the saw blade.

By the time of the Industrial Revolution in the 18th century, the circular saw blade had been invented, and with the development of steam power in the 19th century, a greater degree of mechanization was possible. The scrap timber from the mill provided a fuel source to ignite the boiler. The arrival of railroads meant that logs could be transported to mills rather than mills being built alongside mobile waterways. In 1900, the world's largest sawmill was operated by the Atlantic Lumber Company in Georgetown, South Carolina, using logs that floated down the Pee Dee River from the Appalachian Mountains. The introduction of electricity and high technology in the 20th century advanced this process, and now most sawmills are huge and expensive facilities where most aspects of the business are computerized. Besides sawn timber, a wide variety of forest products are offered, making use of all by-products including sawdust, bark, sawdust and wood pellets.