The first mention of a house on this site goes back to 1804-1806. The present house was most likely built in the early 1830s, possibly by Charles Northend Cogswell, an attorney in a local law firm who also served in the Maine State Legislature in the 1830s and 1840s.

By 1856, the house was already a property of John Bowdoin Nealley and his wife Mary Elizabeth Jewett Nealley, who was locally acclaimed author Sarah Orne Jewett's second cousin. Nealley came to South Berwick in 1830, migrating eastwardly to this thriving manufacturing mill-town from Nottingham, New Hampshire.

John B. Nealley was a member of a family of entrepreneurs who had a "great talent for thrift and business ability". He opened a law practice in 1840, and went on to become a justice of peace and the owner of a country store.

Later, he became South Berwick's tax collector, and in 1870-71 served as a Maine State Senator.

In 1920, the house was sold by one "Gardner" to Frank G. Clement and his wife, Lillian. In 1936, Teresa E. Reid bought the house for "one dollar and other valuable consideration" from the Clement family. The Reid's sold the property in 1951 to German immigrants Bruno and Ursula Richter, and in 2004 it was purchased by its present owners.

Originally, the property lines ran all the way down to the Salmon Falls River, which separates South Berwick from Rollinsford, New Hampshire. In 1841, a railroad connecting South Berwick with Portland and Boston was constructed and cut the property off quite substantially back from the Salmon Falls. J.B. Nealley did retain property rights on the other side of the railroad however, and the town's own "Nealley Street" remains a part of a functionally quaint South Berwick neighborhood in that general vicinity to this day. The railroad discontinued operation in 1952, but the remains of the old railroad bed can still be seen running along the south-western border of the property.

The Federalist architecture of the Nealley House seems to follow the design of Asher Benjamin, the famous American architect whose books on design greatly influenced the look of a traditional New England town.