Sterling was first settled by Europeans in 1720 and was officially incorporated in 1781.

Previous to its incorporation it was “the Second Parish of Lancaster,” and was commonly called by a portion of its Indian name, Chocksett. The Nipmuc minister, Peter Jethro, worked in the area in the 1670s. The original Indian name of the area being Woonsechocksett. The land encompassing the Chocksett region was not originally included in the first land sold by the great Indian Chief Sholan to the settlers of the Lancaster grant. However, Sholan’s nephew Tahanto would eventually sell the Chocksett land to inhabitants of Lancaster in 1713.

The first white settlers arrived in Chocksett seven years later in 1720, formerly inhabitants of Lancaster proper. Among these first settlers were families such as Beman, Sawyer, Houghton, and Osgood; names reflected to this day in the names of Sterling’s oldest roads.

A short time after settlement, in 1733, the residents of the Chocksett area requested its own incorporation, separate from Lancaster, due to the “great inconvenience” of a long distance to the church in Lancaster’s center. This request was denied. However, by 1780 the population of Chocksett was so numerous as to constitute a majority, and so the voters of the area voted out the existing Lancaster town officers and began to conduct town business and meetings in Chocksett. This was enough to convince the rest of Lancaster that it was now time for Chocksett, the Second Parish of Lancaster, to go its own way.

In 1781, Chocksett was incorporated as its own town: Sterling. The town derives its name from General William “Lord Stirling” Alexander, who served valiantly under Gen. George Washington in the New York and other campaigns. His portrait hangs in the town hall, and the town commemorated Alexander with a medallion during its bicentennial celebration in 1976. A duplicate portrait resides in the town hall of New Windsor, NY.

Residents recently approved and built new facilities for the police and fire departments.

According to the United States Census Bureau, the town has a total area of 31.6 square miles (82 km²), of which 30.5 square miles (79 km²) is land and 1.1 square miles (2.8 km²), or 3.42%, is water.

Interstate 190 cuts Sterling in half. Sterling is also crossed by Massachusetts Route 12, Massachusetts Route 62, Massachusetts Route 140, and Massachusetts Route 110.

Sterling is bordered by Leominster to the north, West Boylston to the south, Princeton and Holden to the west, Lancaster to the northeast, and Clinton and Boylston to the southeast. Sterling borders Boylston on the Wachusett Reservoir.

As of the census of 2000, there were 7,257 people, 2,573 households, and 2,068 families residing in the town. The population density was 237.7 people per square mile (91.8/km²). There were 2,637 housing units at an average density of 86.4 per square mile (33.4/km²). The racial makeup of the town was 98.06% White, 0.58% African American, 0.10% Native American, 0.40% Asian, 0.01% Pacific Islander, 0.28% from other races, and 0.58% from two or more races. Hispanic or Latino of any race were 0.81% of the population.

There were 2,573 households, out of which 39.9% had children under the age of 18 living with them, 69.8% were married couples living together, 7.3% had a female householder with no husband present, and 19.6% were non-families. 15.3% of all households were made up of individuals, and 6.1% had someone living alone who was 65 years of age or older. The average household size was 2.82 and the average family size was 3.16.

In the town, the population was spread out, with 27.5% under the age of 18, 5.6% from 18 to 24, 30.7% from 25 to 44, 27.1% from 45 to 64, and 9.0% who were 65 years of age or older. The median age was 38 years. For every 100 females, there were 99.1 males. For every 100 females age 18 and over, there were 95.1 males.

The median income for a household in the town was $67,188, and the median income for a family was $76,943. Males had a median income of $51,227 versus $32,734 for females. The per capita income for the town was $28,844. About 1.7% of families and 2.9% of the population were below the poverty line, including 4.5% of those under age 18 and 5.7% of those age 65 or over.

The tax rate in Sterling has remained fairly steady over recent years and has occasionally been reduced by a small percentage. These small decreases however have been dramatically overshadowed by extreme increases in house evaluations resulting in many residents effectively paying 50–75% more in taxes in 2005 as compared with five years earlier.

The Waushacum Village Homeowner’s Association, however, being a private neighborhood southeast of the Sterling Junction, employs a system in which the land is leased from the neighborhood committee, which creates low house valuations in the area.

The Waushacum Village Homeowner’s Association is also the only neighborhood in Sterling that operates a unified sewage and waste management system.