Founded in 1932, the League of New Hampshire Crafstmen had its beginnings in the 1920s in two small towns, Sandwich and Wolfeboro. For years, the women of Sandwich had been passing the long hours of the cold New Hampshire winters crafting woven rugs, lace, and embroidered items to sell at summer fairs.

In 1926, a summer resident of Sandwich, Mrs. Mary Coolidge, was so impressed with the handiwork of these talented women that she opened the first Sandwich Home Industries Shop to sell their rugs, woodworking, baskets, candles, dresses, and cornhusk doormats.

At about the same time, a group sponsored by the local Rotary Club and under the leadership of Mr. A. Cooper Ballentine, a metal worker, began offering craft classes in Wolfeboro. Eventually, these two groups got together and decided that more needed to be done to keep crafts alive in the state and to help people weather the economic problems caused by the Great Depression.
In 1931, New Hampshire Governor John Winant agreed to establish and fund the New Hampshire Commission of Arts and Crafts, thereby making New Hampshire the first state in the union to support craft making. Soon after, in February 1932, the committee founded the League of NH Arts and Crafts and opened its first official League Shop in Wolfeboro.

The organization also began to persuade other local communities within the state to sponsor craft classes and to provide places for craft artists to sell their work. Initially, at least 10 communities approved the idea. On September 8, 1940, 100 residents of Hanover met and decided to join the state organization.

However, the problem of space plagued the group throughout the 1940s. They managed to hold sales during the summer in a small space rented from the Green Lantern Tea Room. In 1952, Dartmouth came to the rescue when they offered a wooden, two-story building at 10 Lebanon Street in Hanover. In 1959, construction began on the building that is now occupied by the Hanover Group.