The villages of East and West Butsfield lie close to Lanchester amid beautiful countryside. The earliest occupation in the area may date to the Mesolithic period when the first settlers were beginning to settle in this part of County Durham. Some flint tools of this date have been found on Butsfield Fell. These may have come from the site of an early hunting camp. These first settlers may not have settled here permanently, and probably moved between several different camps, so they could collect food from a range of different environments.

By the Bronze Age people were settling in this area permanently - a beautiful flint arrowhead of this date has been found at Glebe Farm. The remains of two prehistoric querns have also been found. These were used to grind flour, and show that crops were being grown in the area by 2000BC.

The Roman fort at Lanchester was not far from Butsfield, but few Roman remains have been found in the area. The only indications of remains of this period is a possible metalworking site, which may have produced iron for use by the Roman army.

There was certainly settlement here during the Anglo-Saxon period- the name of the parish comes from the Old English for 'the open country/field of Bota'. As it was part of the parish of Lancheser in the medieval period Butsfield did not have its own church, and the local people had to travel to Lanchester. Byerley House may have originally been built in the 12th century- although the current building is of 19th and 20th century date, earlier foundations have been found.

Butsfield still remains mainly a farming area, though much of the part of Lanchester Common that extended into Butsfield was planted with trees in the 19th century.