Merstham or 'Mearsaetham' is mentioned in a document in 947 A.D. Many suggestions have been put forward for the source of the name but it means, perhaps, 'homestead by the horse enclosure'. At the time of the Domesday Survey in 1086 the manor of 'Merstan' was held by the Archbishop of Canterbury for the benefit of the monks of Christ Church Priory at Canterbury. A mill is recorded in Domesday and also a church. The parish church of St Katherine, north of the village centre on the slope of the Downs, was mainly built in the 13th century.

Merstham was surrendered to Henry VIII in 1539 when Christ Church Priory was dissolved. Henry granted it to Sir Robert Southwell. It passed through several hands until 1606 when the property was sold to John Hedge and it then, by marriage, came to the Gainsfords. In 1678 Nicholas Gainsford sold Merstham to Sir John Southcote. In 1788 Merstham became the property of the Joliffe family and remained with the Jolliffe family until the 20th century.

There were very important quarries at Merstham especially in the medieval period. 'Reigate Stone' from the from here was used for the king's palace at Westminster in 1259 during the reign of Henry II, and Edward III used it at Windsor Castle a century later. The stone was popular for church and house building. It was also incorporated in Henry VIII's palace of Nonsuch near Ewell where construction began in 1538. The chalk at Merstham was made into lime by burning for use as agricultural manure or for making mortar and later cement. It was at the Merstham Quarries in 1867 that Alfred Nobel, the inventor of dynamite, who is also remembered for the Nobel Prizes, carried out experimental explosions.

The mineral wealth of the area was the encouragement for the building of the Surrey Iron Railway, the world's first public railway, opened to Croydon in 1803 and extended to Merstham in 1805. Waggons were drawn by horses along the line, which started from the banks of the Thames at Wandsworth. The intention of finally extending the line to Portsmouth was never fulfilled.

William Jolliffe, M.P. for Petersfield in Hampshire, built 'The Great House' at Merstham in 1790 and his sons, William and Hylton, started lime works and stone quarries here. With Edward, later Sir Edward, Banks they established the civil engineering firm of 'Jolliffe and Banks'. The firm built the new London Bridge in 1831 and were also responsible for many other building projects including Southwark Bridge, Sheerness Docks and Staines Bridge.

The first railway station at Merstham on the main line to Brighton opened in 1841 and it gradually brought new residents to the village. Merstham still retains a number of old and characterful houses, especially in the appropriately named Quality Street.

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