Chartered in 1758 by Lewis Stephens, this is the second-oldest town in the Valley after Winchester. Its location at the intersection of the Valley Pike (U.S. 11) and the Old Dutch Wagon Road (VA 277), once a major road linking Alexandria to the Cumberland Gap in Tennessee, defined its physical and commercial growth. Many of its businesses were geared toward transportation, most notably the production of the high-quality Newtown wagons. The first settlement was founded shortly after 1732, when Peter Stephens, father of Lewis Stephens, who journeyed from Pennsylvania with Jost Hite, built a house in the area. Originally called Stephensburg, after its founder, who owned the nine hundred acres that made up the town, it almost became the Frederick County seat, but lost out to Winchester. According to legend this happened because James Wood, founder of Winchester, persuaded one of the justices who was voting on the issue to vote in his favor by giving him a “bowl of toddy.” The community was later known as Newtown and was renamed Stephens City in the late nineteenth century. A 1758 survey of the town shows a square grid plat of eighty half-acre lots and sixty one-acre lots, a layout still clearly evident in the town's street patterns and lot sizes. During the Civil War, the town changed hands many times, six times in one day alone, and its buildings and houses served as hospitals for the wounded, especially after the Battle of Cedar Creek on October 19, 1864. Stephens City includes several eighteenth- and early-nineteenth-century log houses, notably at 5374 Mulberry Street and 5328 Main Street, as well as a large number of later buildings. An interchange for I–81 at Stephens City encouraged commercial development near its junction, but downtown has survived with restaurants and shops oriented to history-seeking tourists.
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