The tract of land called Jerusalem was patented to Nicholas Hampstead and John Walley in 1687. By 1743, the tract had been acquired by an ironmaster, Stephen Onion, and had been enlarged to with several buildings. When Onion died in 1750, his nephew, Zacheas Barrett Onion, acquired the property. Onion engaged Isaiah Linton of Bucks County, Pennsylvania to come to Jerusalem to construct a merchant grist mill and to improve a nearby ironworks and several other mills. Linton was joined by his family and partner David Lee. He eventually built eight water-powered mills along the Little Gunpowder. The fourth mill, Jerusalem Mill, was completed in 1772 and is now the centerpiece of the living history village. The village functioned as a Quaker village into the early 20th century. Evidence suggests that David Lee and several of his Quaker neighbors carved black walnut stocks and assembled rifles for the Continental army in the gunshop that stands behind the gristmill. During the Civil War, on July 11, 1864, Confederate Army Major Harry Gilmor sent a cavalry unit to the general store in Jerusalem Mills, now popularly known as McCourtney's Store, capturing supplies and horses, as part of Gilmor's Raid. After the Civil War, the buildings in the village were gradually leased out and sold. A succession of owners operated the gristmill until 1961, when it was then purchased by the State of Maryland to be part of the Gunpowder Falls State Park. The historic buildings are being restored and preserved by Friends of Jerusalem Mill, an all-volunteer, non-profit, public charity, which has leased the village from the state of Maryland since 1986. Its current lease is valid through 2039. Restoration, preservation and maintenance efforts are funded almost entirely by donations, sponsorships, memberships, events and countless volunteer hours. Events include a living history program, concerts by the falls, jousting tournaments, vintage baseball, First Responders' Day, and a lot more. Efforts are currently underway to stabilize and preserve the Lee Family's historic Bank Barn, mansion and two-story springhouse-smokehouse. On April 10, 2016, a Blue Star Memorial Highway marker was dedicated at Jerusalem Mill, honoring those who served in the U.S. armed forces.
