The original part of the village is designated as a Conservation Area and to the north and west lies the Nidderdale Area of Outstanding Natural Beauty.

The name Hampsthwaite is derived from old Norse and means the thwaite,

or meadow, of Hamr or Hammall. The earliest written record of the settlement (circa 1180) is as “Hamethwayt” in the early Yorkshire Charters. The Roman road from “Olicana” (Ilkley) to “Isurium” (Aldborough) crossed the Nidd at Hamps-thwaite which led to the development of a market. Hampsthwaite was situated within the Forest of Knaresborough, which was established as a royal hunting preserve in the time of William the Conqueror. The church of Hampsthwaite was in existence soon after the Norman Conquest and was at one time in the possession of the monks of Knaresborough.

The Market Charter of Hampsthwaite was granted by Edward I in 1304 and provided for a market every Friday and an annual fair of four days at the Feast of St Thomas the Martyr to whom the Church is dedicated. Markets and fairs were held in the main street. The market was primarily for cattle and there were seven slaughter- houses in Hampsthwaite. The width of the village street allowed the drovers to bring stock in to the market. The terrace adjacent to the Village Room, where the Parish Council hold its meetings, has been built over part of the original market area.

Historically a farming community, there are working farms around the Conservation Area. The built form of the farmhouses, outbuildings, access routes and traditional field patterns contribute to the unique character of the village. Farming has remained the economic mainstay of the village: the hillsides are used for sheep grazing, the meadows for cow pastures and the valley bottom for arable crops. There was also a flax mill - with flax being made into sacks and hessian by the villagers - the main cottage industry. In the late nineteenth century, when the Duke of Devonshire was lord of the manor, the village was a thriving community: tradesmen included shoe makers, grocers and butchers, a saddler, a joiner, tailors, a tinplate worker and innkeepers.

Amongst the well-known residents of the village were Peter Barker (1808-1873), who lived in a cottage near the Church of St Thomas a Becket, and was known as the “Blind Joiner of Hampsthwaite” (he lost his sight at the age of 4). His work to the pulpit and pews in the Church is still evident. The family of the writer William Makepeace Thackeray lived in Hampsthwaite, as did the family of Amy Woodforde Finden (1860-1919) who was best known as the composer of “Kashmiri Song” from The Four Indian Love Lyrics by Laurence Hope. Amy is buried in the Church.