Sandefjord has been inhabited for thousands of years, and excavations indicate people have been here for at least 3,000 years. Rock carvings found at Haugen Farm are the county’s largest petroglyph side.

The Vikings lived in Sandefjord and many Viking artifacts have been found. One of the most important remains from the Viking Age is the grave site Gokstad Mound, where the Gokstad ship was excavated and is now on display at the Viking Ship Museum in Oslo. A replica of the Gokstad Ship crossed the Atlantic Ocean from Bergen to be exhibited at the World’s Columbian Exposition in Chicago in 1893. The Viking settled in Sandefjord because of the close proximity to other places along the coast.

Sandefjord functioned as a seaport throughout the 17th and 18th century and was formally recognised as a market town by the King in 1845.

Throughout the 19th century Sandefjord became known as a health resort destination. Royalty and important people throughout Europe visited the town for its spas in the late 19th century. The Sandefjord Spa and Resort was one of the most visited baths in Europe until it closed in 1939.

Sandefjord is best known as a whaling community as the centre of the world’s modern whaling industry was located here. Locals from Sandefjord not only made up most of the crews on the Norwegian whaling fleet, but a large number of them also worked in the whaling industry in nearby countries. One man from Sandefjord, Hans Albert Grøn, established the firsst whaling station in the Faroe Islands in 1894. For over 50 years in the late 19th century, Sandefjord was the centre of the whaling industry. Besides leading the fleet, Sandefjord also manufactured equipment and vessels. At its peak, there were 25 whaling companies in Sandefjord. In the beginning of the 20th century, expeditions from Sandefjord went as far as Norwegian Bay in Australia, Stewart Island in New Zealand, Walvis Bay in Namibia, Chile, and isolated places such as South Georgia Island and Bouvet Island. In 1904, Carl Larsen from Sandefjord established a whaling community in South Georgia Island. The last whaling vessel from Sandefjord was sold to Japan in 1971.

During World War II, Sandefjord was occupied by Nazis. The Nazis took over the Sandefjord Spa by raising a Nazi flag on it, and all students in Sandefjord were given a book to learn the German language as well as a copy of Mein Kampf. Nazis constructed two fortresses in Sandefjord. Many locals were killed during the war, including a large number of seamen. After the war, Norway became a founding member of NATO and several air bases were constructed in Norway using NATO funds, including Sandefjord Airport, which was to be used by the United States Air Force in case of war.