Littlemill has always claimed to have been established at least in 1772 (the year the Excise Officer's House was built), but prior to that, there was a brewery on the site, attached to the neighboring Dunglass Castle, with a history dating back to the 14th century. After several changes of ownership, Littlemill was expanded by William Hay in 1875, and then changed hands multiple times until it was purchased in 1931 by American gentleman Duncan Thomas, who lived in the former Excise Officer's House. He would go on to establish Loch Lomond Distillery in 1965 in partnership with Barton Brands, Glenlivet's US agent (see relevant entry). The latter acquired Duncan Thomas's remaining shares in Littlemill and Loch Lomond in 1971. In 1984, both distilleries were mothballed. The following year, Loch Lomond was sold to Glen Catrine Bonded Warehouse Ltd. Nowadays the company has been renamed Barton Distilling (Scotland) Ltd, controlled by Amalgamated Distilled Products in Glasgow (part of the Argyll Group). In 1987, Amalgamated Distilled Products sold its whisky interests to Gibson International. Littlemill resumed production in 1989, when the company also acquired Glen Scotia Distillery in Campbeltown. Two years later, Gibson International and its distilleries were acquired in a "multi-million pound" management buyout by company managing director Ian Lockwood and finance director Bob Murdoch. The restructured company entered administration in 1994, and its assets were purchased by Glen Catrine Bonded Warehouse, which demolished the Littlemill distillery two years later. In the following years, the buildings fell into disrepair and suffered a fire in 2003. The site has been largely cleared. The remaining Littlemill stocks are owned by Loch Lomond Group, which released a 25-year-old expression in 2015.

The first government census of whisky in 1821 revealed that Littlemill produced 20,000 gallons of spirit per year (over 90,000 liters). When Alfred Barnard visited the distillery in the mid-1880s, it was producing 150,000 gallons annually, destined for sale in "England, Ireland, India and the Colonies." Barnard described the location as possessing "enchanting scenery quite different from Richmond on the banks of the Thames. The hills and wooded plantations possess a quiet beauty, with hedges full of summer roses tier upon tier, making the place a favorite resort for artists." The distillery once produced "Dumbuck" (heavily peated) and "Dunglass" (lightly peated) style spirits for blending.