As early as 1800s, the settlers were using arks on the Canisteo River to take grain, livestock, and anything else they wanted to sell to market in the city. The New York and Erie Railroad came in the mid 1800s, giving growth to industry. In 1856 a large shop and engine house with a capacity of 42 engines was built in Hornellsville, making Hornell very prosperous. Hornell at one time had 5 silk mills, the Woodward Wire Fence Company, Richardson Boot and Shoe Factory, and the Hollow Cable Manufacturing Company. Allison Boot and Shoe Company was established in 1868 in Canisteo. Five hundred pair of shoes were made daily. Also in Canisteo were Taylor Chairs and Bentwood Works, Canisteo Table Factory, and Canisteo Wooden Ware Plant.

The Village of Canisteo boasts the "world famous living sign" featured at one time in Ripley's "Believe it or Not!" book. The sign was planted in 1933 as an aid to pilots. The display is on a hillside behind the elementary school and is maintained by the local schools. It consists of 260 Scotch Pines which spell the name of the town. With an almost perfect North/South axis, it is still used by the armed services to orient true north when flying over it.