Smugglers Notch is named for the smuggling that was prompted by a request of President Thomas Jefferson to prevent American involvement in the Napoleonic Wars. The United States Congress passed the Embargo Act of 1807 which prohibitied American trade with Great Britain and Canada. The British bypassed the embargo by importing products to Canada and smuggling them down mountain trails through Smugglers Notch. The Act caused great hardship for locals, many of whom continued the illegal trade with Canada, carrying goods and herding livestock through the notch.
The geology of the notch made it well suited for smuggling as the area is remote and laced with numerous caves. The caves were used as hideaways by the smugglers. Much of the illegal activity slowed with the onset of the War of 1812. Smugglers Notch was later used on the Underground Railroad when fugitive slaves used the notch as an escape route to Canada. The route was improved to accommodate automobile traffic in 1922 thus providing a route for liquor to be brought in from Canada during the Prohibition years. The caves were suited to storing illegal alcoholic beverages at near room temperature.
Smugglers' Notch State Park was built near the notch by the depression-era Civilian Conservation Corps founded by President Franklin D. Roosevelt to provide employment for the out of work young men of New England. In 2003 the park was relocated, making way for a larger campground and modern facilities incorporating alternative energy. To preserve the work these pioneering conservationists, all original structures created by the CCC were carefully relocated to the new site.