By 1708, Bath consisted of 12 houses and about 50 people. Trade in naval stores, furs, and tobacco was important, and Bath became the first port of entry into North Carolina. In 1707, a grist mill and the colony's first shipyard were established in the town. A library sent to St. Thomas Parish in 1701 became the first public library in the colony. The parish also established a free school for Indians and blacks.

Later Bath offered a more peaceful, settled life. The first Beaufort County courthouse was built in the town in 1723. Construction of St. Thomas Church, oldest existing church in the state, began in 1734. Ferry service was established across the Pamlico River, and a post road linked Bath to New Bern and Edenton. In 1751, Capt. Michael Coutanch, a merchant, legislator, and commissioner for Bath and Portsmouth, built what became known as the Palmer-Marsh House, Bath's oldest and in the colonial period its largest residence. Col. Robert Palmer, surveyor general, collector for Port Bath, and member of the Governor's council, later owned the house.

The General Assembly met in Bath in 1743, 1744, and 1752. In 1746 the town was considered for capital of the colony. Governors Robert Daniel, Thomas Cary, Charles Eden, and Matthew Rowan made Bath their home for a time, as did Edward Moseley, long time speaker of the assembly. In 1776 a new town, Washington, was formed 15 miles up the Pamlico River. When Beaufort County government moved there in 1785, Bath lost most of its importance and trade. In the early nineteenth century, the Marsh and Bonner families and Jacob Van Der Veer added to the vitality of the town as merchants, shippers, and active citizens. Van Der Veer manufactured rope outside of town and was a partner with Joseph Bonner in an early steam sawmill. Bonner also operated a turpentine distillery.

Bath was spared from Union occupation, common in coastal North Carolina, during the Civil War. By the turn of the century, Bath had improved land transportation. Waterborne activities also increased as several large sawmills were operated nearby. Yet Bath remains a small village. Restoration efforts in Bath have saved the St. Thomas Church, the Palmer-Marsh House, Van Der Veer House (ca. 1790), and the Bonner House (ca. 1830). The original town limits are the boundaries for a National Register historic district.