Although the main mill buildings date back to the mid 18th century, and it is believed that there was in fact a Mill on the present site way back in the 1400s, little is known of Otterburn Mill's history prior to 1821.

It was in this year that William Waddell of Jedburgh, younger member of a respectable family of woollen manufacturers, brought his young bride, 17 year old Charlotte Ferrier, with whom he had eloped, to the remote borders village of Otterburn - Charlotte having absconded from the fashionable "School for Young Ladies" in George Square, Edinburgh.

The textile trade was one of the first to benefit from the Industrial Revolution and, at the start of the 19th Century, woollen mills were being built by landlords to convert and profit from locally produced wools. By the 1820's the practice of these landlords had changed - they began leasing off these sites to the new generation of men trained in bulk textiles.

Undaunted by the prospect of a crippling 109 year lease, whose terms precluded any substantial expansion, William, aided by his wife, their ever-increasing family, and a small local workforce, took in the wool fleeces from local farmers and in return supplied the farmer with blankets, cloth or knitting yarn. The wool was converted to yarn in the mill and sent to the local hand loom weavers who produced the blankets and cloth. The woven product was returned to the mill to be washed and finished, ready for use.