The earliest written record of Leatherhead appears in a Saxon charter of around 880 AD, as Leodridan, meaning "the place where people ride across the water." The Domesday Book records it as Leret. The town grew up around the crossing of the River Mole, and the medieval bridge (rebuilt several times, most recently in the 18th century) has been a defining feature for centuries. In times of drought, the River Mole famously disappears underground through the chalk, creating the "Swallow Holes" between Leatherhead and Mickleham that have puzzled and delighted visitors since at least the 17th century.
The Running Horse inn on Bridge Street dates from the 14th century. Some scholars have suggested it may be the "Tabard-like" inn mentioned in Chaucer's Canterbury Tales, though this connection is debated. What is certain is that the timber framed building is one of the oldest surviving inns in Surrey. A Roman villa discovered at nearby Ashtead, with fine mosaic floors, provides evidence of much earlier settlement in this part of the Mole Valley. Ashtead Common, now a National Nature Reserve, contains hundreds of ancient oak pollards that were managed for timber as far back as the medieval period.
The town developed steadily as a market centre for the surrounding countryside. The grammar school was established in 1596 and operated for over 350 years. The Thorndike Theatre (now the Leatherhead Theatre) was named after Dame Sybil Thorndike, the celebrated actress who lived nearby. Polesden Lacey, the Edwardian country house managed by the National Trust above the town, hosted the honeymoon of the future King George VI and Queen Elizabeth in 1923. The house itself was remodelled by the society hostess Margaret Greville, who entertained royalty and political figures there throughout the 1920s and 1930s.