The Romans built a stone fort at Waterhead called Galava around AD 120 (now in Borrans Field) - one of a number built to secure trade and service routes through South Lakeland. Galava was linked to the Roman port at Ravenglass (via Hardknott Pass), to Brocavum (Brougham) near Penrith along ‘High Street' (an elevated Roman road between Ullswater and Haweswater), and southwards to Watercrook, near Kendal. After the Romans departed around AD 400, Norse settlers moved in, founding a settlement on high ground above the town centre. It is thought that Ambleside may have been named after a Norseman called Amal (i.e. Amal's saeter - or summer pasture).
Medieval Ambleside had a thriving woollen industry centred on Stock Ghyll. This fast-flowing beck provided power for a number of fulling mills (fulling was the process of pounding newly woven cloths with heavy hammers (or stocks) in soapy water to thicken and shrink the fabric). The coarse cloths were taken by packhorse to Kendal for finishing and then despatched all over the country and overseas. The beck also powered corn and flax mills and in later years, bobbin mills and bark-crushing mills (for the leather tanning industry). Woodland industries were very important with many of the surrounding woods being coppiced to provide wood for charcoal (to smelt iron ore) and bobbin production.
Ambleside was granted a market charter in 1650, and Market Place became the commercial centre for agriculture and the wool trade. The old packhorse trail (now a bridleway) between Ambleside and Grasmere was the main route between the two towns before the new turnpike road was completed in 1770 (now the A591). Smithy Brow at the end of the trail was where packponies were re-shod after their journey. With the coming of the turnpikes, the packhorse trains were superseded by horse-drawn stagecoaches, which regularly travelled between Keswick and Kendal (via Grasmere, Ambleside and Windermere). The Salutation Hotel, a former hostelry dating from 1656, developed into a coaching inn where horses could be stabled overnight. The Royal Oak and the White Lion were also coaching inns.