The settlement of Madeley is recorded as far back as the Domesday Book. The town was founded prior to the 8th century, and subsequently became a market town in the 13th century.

Sigward, a local ruler in the time of King Æthelbald of Mercia, is said to have held 3 hides of land at Madeley. Between 727 and 736 he sold his holdings to Mildburh, daughter of Merewalh, sub-king of the Magonsæte. She was the founder and first head of Wenlock Abbey. The monastery was refounded as a Cluniac priory after the Norman conquest but the manor of Madeley belonged to the church of Wenlock, throughout the Middle Ages, until the Dissolution of the monasteries. It passed to the Crown in 1540 and in 1544 was sold to Robert Broke, a prominent lawyer and politician from Claverley.

Mining of coal began before 1322, and the extraction of ironstone had begun by 1540.

The town played a role in the English Civil War, as it was home to a garrison of Royalist soldiers in 1645, although this post was abandoned after the fall of Shrewsbury. Two months later, Parliamentary forces occupied the parish church. Madeley is also home to a barn in which King Charles II hid after the Battle of Worcester in 1651.

In the 17th century, Madeley was a small market town, but local tradesmen began to specialise, working in the river trade and in mining. In the 18th century, The Iron Bridge was built between Madeley Wood and Coalbrookdale and the settlement of Ironbridge grew by it, which took some of the commercial trade away from the old town of Madeley, including its market. Madeley Court Gatehouse

In the 1970s, significant construction of new housing and recreation areas was undertaken by the Dawley Development Corporation, later known as the Telford Development Corporation, as part of the development of Telford New Town.

Several of Madeley’s historical sites of interest are waypoints on the South Telford Heritage Trail including: Madeley Court, Madeley High Street, Jubilee House, St Michael’s Church, Madeley Windmill and the Madeley Salop Railway Station. The gatehouse to Madeley Court is a grade I listed building.