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The Newby Bridge Hotel was originally known as the Newby Bridge Mansion. It was built in 1793 by James Machel, whose family had been prominent in the area since the 12th Century when Ulf the Machel was the local laird. Newby Bridge Mansion was of the first great houses to be built on the shores of Lake Windermere.

The Machels were friendly with William Wordsworth and copies of correspondence with the great poet are displayed at the hotel, including a poem by Wordsworth "To Lizzie" which is dedicated to one of the Machel children. The literary connection has continued through the years, as Arthur Ransome, author of Swallows and Amazons was also a frequent visitor to the hotel.