The site for what would become Cambridge was chosen in December 1630, because it was located safely upriver from Boston Harbor, which made it easily defensible from attacks by enemy ships. Thomas Dudley, his daughter Anne Bradstreet, and her husband Simon, were among the first settlers of the town. The first houses were built in the spring of 1631. The settlement was initially referred to as “the newe towne”. Official Massachusetts records show the name capitalized as Newe Towne by 1632 and a single word Newtowne by 1638. Located at the first convenient Charles River crossing west of Boston, Newe Towne was one of a number of towns (including Boston, Dorchester, Watertown, and Weymouth), founded by the 700 original Puritan colonists of the Massachusetts Bay Colony under governor John Winthrop. Its first preacher was Thomas Hooker, who led many of its original inhabitants west to found the Connecticut Colony; before leaving, however, they sold their plots to more recent immigrants from England.[10] The original village site is in the heart of today’s Harvard Square. The marketplace where farmers brought in crops from surrounding towns to sell survives today as the small park at the corner of John F. Kennedy and Winthrop Streets, then at the edge of a salt marsh and since filled. The town included a much larger area than the present city,[10] with various outlying parts becoming independent towns over the years: Cambridge Village (later Newtown and now Newton) in 1688, Cambridge Farms (now Lexington) in 1712 or 1713, and Little or South Cambridge (now Brighton) and Menotomy or West Cambridge (now Arlington) in 1807.In the late 19th century, various schemes for annexing Cambridge itself to the city of Boston were pursued and rejected.

In 1636, the Newe College (later renamed Harvard College after benefactor John Harvard) was founded by the colony to train ministers. Newe Towne was chosen for the site of the college by the Great and General Court (the Massachusetts legislature) primarily—according to Cotton Mather—to be near the popular and highly respected Puritan preacher Thomas Shepard.