The town is located in the steep-sided valley of the Little Don River. The valley bottom is almost entirely occupied by steel works, which have been the main spur for the growth of the settlement, which didn't exist until the early nineteenth century. Although at one time, workers were bussed in from miles around, the steel works now employ few, and steel manufacture is due to cease in the town.
Samuel Fox was the owner of the steel works from the 1850s, and built most of the infrastructure of Stocksbridge.