In 1664, the Duke of York, James, was granted this land by King Charles II after the English Colonel Nichols captured New Amsterdam. One of the first acts by the Duke was to remove all the Dutch from the colony; the Dutch capital in Delaware Bay, New Amstel, was renamed New Castle. In 1672, the town of New Castle was incorporated and English law ordered. Then, in 1673, the Dutch regained the territory by force, but the colony failed so it was returned to the English by the treaty of Westminster in 1674. On September 22, 1676, New Castle County was formally placed under the Duke of York’s laws, and made part of the Colony of New York. It gained land from Upland County on November 12, 1678.

On August 24, 1682, New Castle County, along with the rest of the surrounding land, was transferred from New York to the possession of William Penn, who established the Colony of Delaware.