Located at the intersection of Lincoln Highway and Old Wilmington Road, the village grew up around a hotel which was built by John Sloan circa 1799. It was a midway stopping point for travelers between Philadelphia and Lancaster and the hotel, with four daily stagecoach stops, did well until the 1930s when the Pennsylvania Railroad sited a station a mile south of the Hotel. The hotel has changed hands and uses over the years, being variously a tavern, apartment building, and cocktail lounge. It survives today and since 1992 has been the home of "Harry's Famous Hotdogs."
The town name Sadsbury is a derivative of an English town, Sudbury.