The Inn's name is taken from the town's original name.
The early settlement was called Sherburne (although earliest records show it as Sherborn). It was named after the English homeland of some of the early settlers. The name of the town was changed to Nantucket in 1795.A group of island merchants promoted the idea that Chinese mulberry trees, and therefore the silkworms they fed, would take naturally to the island's climate and growing conditions. This would make it possible to spin and weave silk locally. It was a daring idea; if it worked, Nantucket would become the first place in America to produce fine silks. Sherburne Inn dates back to 1835, when it was built as headquarters for the Atlantic Silk Company.
On March 31 the Atlantic Silk Company was founded. They had been in such a hurry that the building was built sitting on barrels, since the foundation didn't go in until the ground thawed in the spring.
A great deal of money was spent very quickly. A steam engine, six looms, four spindles, and five hundred bobbins were installed. Cocoons, eggs, silkworms, and Chinese mulberry cuttings arrived, and a man by the name of Gamaliet Gay (after whom the street was named) came from Providence to run the factory. Twenty Nantucket women were trained to operate the works. The Atlantic Silk Company boasted ownership of one of the only two power looms in the world.
The silk produced was competitive, in texture and weave, with the best on the market. However, things went wrong from the start. The mulberry trees did not flourish in Nantucket's sandy soil and cold fogs. Serious internal shenanigans broke the company apart, and local merchants, threatened by this new enterprise, apparently contributed to its downfall. By 1844 the factory had closed, having lost many thousands of dollars of its investors' money.
The old factory was divided vertically into two separate dwelling units. The east side of the building was used variously as a lodging house and an inn since 1870. Over its long history the Inn has been variously named the Waverly Inn, the Sherburne Inn, The House at 10 Gay Street, and the Summit Inn. It was renamed the Sherburne Inn about twenty years ago.