The village is situated at the former Mohawk village of "Caughnawaga." The village Fonda is named after the Fonda family when they settled in New Netherland in the seventeenth century.
The European settler village was founded in 1751 at the site of Caughnawaga.
Fonda thrived by the opening of the Erie Canal in 1825 and the arrival of the railroad in 1835. The village was incorporated in 1850.