The village of Satley lies in a narrow valley between Lanchester and Tow Law. It was for a long time part of the larger parish of Lanchester, but became a parish in its own right in 1868. Steeley Burn flows through a deep, wooded ravine to join the river Browney below the village.

The earliest people to live in this area were probably Mesolithic hunters, who may have made a temporary camp in the area as they travelled to or from the North Pennines, where they would have hunted wild animals during the warmer summer months. However, these early hunters have left no permanent trace in the area.

It is not until the Bronze Age that we begin to find archaeological evidence for Satley's earliest inhabitants. A flint arrowhead has been found; this may have been used for hunting, but as by this period farming was being practiced it may have been used for warfare in land disputes. A stone hammer found near Satley Grange may also have been a weapon, but it is more likely that it was used by Bronze Age farmers as a tool, perhaps to clear trees to make new fields. It is quite possible that a small stone-lined grave found on Hedley Common was the grave of one of the people who used the hammer.

Although the Iron Age inhabitants of the area would have lived in small round-houses like their Bronze Age predecessors, we have no remains of their settlements, nor of the Roman residents of the area. The Romans arrived nearby, they build a fort at Lanchester, but no remains of their activity have been found in Satley.

The village of Satley is probably of late Anglo-Saxon or medieval date. The '-ley' part of the village name is a word used by the Anglo-Saxons to show that a village stood in a clearing in a wooded area. This suggests that the Bronze Age farmers had not cleared all the forests in the area. Few medieval houses remain in the village, although the plan of the village, with rows of houses arranged along a main street suggests that it was laid out in the late 11th or early 12th century. The church is Victorian, probably built when Satley became a parish, but medieval stones in its west wall indicate the presence of an early chapel. A hermitage also existed in the parish, though no remains can be seen today.

The parish church of St. Cuthbert's is known to contain a number of plaques dedicated as war memorials commemorating those of the area who served and fell in the First World War and subsequent conflicts. The more traditional village memorials within Lanchester probably contain the names of some of the inhabitants of Satley not accounted for on the church memorials.