Newberry was founded in 1882 and became the county seat when Luce County was separated from Chippewa County in 1887. Its first courthouse was completed in 1890.
The village was named in honor of John Stoughton Newberry, a U.S. Representative and industrialist from the state of Michigan.
Historic preservationists lost the 1970s fight to save the county's Victorian courthouse, but managed to keep the elaborate sheriff's house, now the Luce County Historical Museum.
The Newberry area was the location of two major wildfires. The Sleeper Lakes Fire took place in August 2007 and burned approximately 29 square miles (75.1 km2) just north of Newberry. In May 2012, the Duck Lake Fire burned approximately 34 square miles (88.1 km2) of forests near Tahquamenon Falls State Park to the northeast. Both wildfires were caused by lightning strikes. While the village itself was not threatened, firefighting efforts were coordinated in Newberry.