The area where Montgomery now stands was originally inhabited by the Native American Alibamu tribe (for whom the territory was named). Settlers began moving into the area as early as 1800, but it was not until 1814 that two competing businessmen founded separate towns, East Alabama and New Philadelphia, along the Alabama River. Despite the fierce competition between the two townships, both flourished and eventually merged into a single city. In 1819, when Alabama became a state, the city was renamed Montgomery in honor of a Revolutionary War major-general who died while trying to capture the Canadian city of Quebec.

Andrew Dexter, the founder of New Philadelphia, was convinced that his settlement would eventually become the capital of a new state. Even before Alabama's statehood was ratified, he set aside land for the capitol building. When the capital was eventually moved from Tuscaloosa to Montgomery in 1846, Dexter's land was purchased for that very purpose.