The Indian name for the area was Madamescontee meaning an abundance of alewives. Alewives, small, salty fish, spawn in Damariscotta Lake, which extends northwest of the town through Nobleboro, Newcastle, and Jefferson.
The actual name Damariscotta is of uncertain origin, being either an alternate pronunciation of the Indian name, or related to an Englishman Humphrey Damerell, or his name in conjunction with that of a local sagamore John Cotta. Thus are the challenges of discovering the native name, if any, for many Maine places.
The Great Salt Bay, which borders the northwest corner of the town, is the state's first marine shellfish protected area and one of Maine's many nature preserves. Formerly polluted by industrial activity, it has been closed to shellfish harvesting for many years.
The town became noted for its clipper shipbuilding and brick-making. Now a residential community with summer tourist attractions, it is located just off U.S. Route 1, on Route 1B, it is at the head of the Damariscotta River.
From Maine: An Encyclopedia (www.themaineencyclopedia.com)