Canobie Lake Park opened on August 23, 1902, as a trolley park for the Massachusetts Northeast Street Railway Company. In its early years, the park was known for its flower gardens, promenades and gentle attractions. After the decline of trolley as a mode of travel, the park declined in popularity, culminating in the park's closure on St. Patrick's Day in 1929. In 1931, the park was auctioned off with the intent to subdivide the land into residential lots. Patrick J. Holland, a construction contractor from Ireland, bought the property for US$17,000. He and his workers restored the park with new gardens, attractions, and modern electricity. In 1932, the park reopened, three years after its initial closure. Its popularity recovered, and the Yankee Cannonball was installed, becoming one of the park's most popular attractions for decades. Holland died in 1943, leaving the park with his wife and son, who continued to own the park until 1958. The park is now currently owned by three families; they purchased the park in 1958, continued operating the park ever since, and still operate the park today.

Some films and novels have used Canobie Lake Park as a setting or filming location. Stephen King, an American author of horror novels, based the amusement park in his novel Joyland on Canobie Lake Park. A resident of the nearby state of Maine, King visited after searching for a park "that was nice and clean and sunlit, but wasn't too big". During a visit in 2012, King took photographs inside the dark ride attraction, "Mine of Lost Souls", because he wanted to incorporate a haunted dark ride into his novel. The park was also used as a filming location for the 2013 film Labor Day, based on the novel of the same name by Joyce Maynard. It also appeared in two live action children's TV shows on PBS Kids that were produced by PBS affiliate WGBH Boston; it was featured in an episode of Fetch! with Ruff Ruffman, as well as in the season 6 opening intro to the show Zoom.