Following his success in Nottingham, in 1771 the Georgian entrepreneur Sir Richard Arkwright turned his attention to developing a radical new cotton mill in Derbyshire. A partnership was formed between Arkwright, Jedediah Strutt, Samuel Need and John Smalley, and they chose the small village of Cromford to build their mill.

To many this was deemed an unusual choice, being not only remote and distant from the expanding cotton towns of Nottingham and the north-west, but also some distance from a sea port. However, it was on a recognised pack-horse route, and had a very good water course that required minimal engineering to redirect its power. It was this constant availability of water that would be the key to the success of Cromford Mill, as Richard Arkwright set about developing a site that would facilitate his new invention, the 'Water Frame', which was to transform the spinning of cotton and effectively start the industrial revolution.

Work began on the first mill in August 1771, and was completed by Christmas, with production commencing in 1772. Comprising five storeys, the building was originally 100 feet x 29 feet (30m x 9m). By 1776, the first mill had been so successful that the partners were ready to expand their business, and a second mill building was constructed a little way downstream. Larger than the first, the new mill would be seven storeys high and 20 feet (6m) longer. The mill was powered by the same water source as the first mill but, to ensure a greater fall of water and therefore more power, the waterwheel was sunk into a deep pit beneath the mill building. Unfortunately, the building was completely destroyed by fire in 1890 and only the foundations and wheel pit remain.

By the 1780s Arkwright had become a very wealthy man, and in 1783 he built the Masson Mill complex a short distance to the north. In 1785 he also embarked on a major redevelopment of the Cromford Mill site, extending the first mill northwards towards Scarthin Rock, and adding a second waterwheel fed by an aqueduct. This would help power a new five storey warehouse adjoining the first mill. Several other buildings were added at this time, including a three storey stone workshop and red brick counting house (pictured), as well as Grace Cottage that may have been the gate keeper's house.

In 1789 a four storey 'L' shaped extension was added to the second mill which, although damaged by the fire of 1890, still survives largely intact today. Other warehouses and ancillary buildings were also constructed but development of Cromford Mill would finally cease in 1791.

Cromford Mill would continue in cotton production until the mid 19th century but, with disputes over water rights and lack of investment in steam power, together with the site's remote location, Cromford Mill became uneconomical. When the cotton spinning came to an end, the mill buildings were used variously for other industries, the last of which was the Cromford Colour Works.

At the closure of the site in 1979, many of the buildings were found to be heavily contaminated with Lead Cromate and it seemed that the only course of action would be demolition. However, the Arkwright Society purchased Cromford Mill and it has since been restored to reflect much of its former glory. The complex of buildings is now Grade 1 listed, and formed a key part of the Derwent Valley Mills World Heritage Site in 2001.