Anticipating a boom in canal commerce, Colonel James Kilbourne (1770-1850) platted Lockbourne in 1831 at the junction of the Ohio-Erie Canal and the Columbus Feeder, which was completed the same year. Lockbourne derives its name from the numerous canal locks at this site and Kilbourne's own surname. During the heyday of the canal era, Lockbourne boasted the Canal House Hotel, several taverns, a stock yard, a distillery, a sawmill, and a gristmill which used the head of water at Lock 30 for power.
The Monypeny distillery, for many years Lockbourne's largest industry, produced 100 barrels of whiskey a day and was located at the east end of town. The distillery owned two canal boats, the Magnolia and the Cruiser. At the intersection of the main canal and the Columbus feeder stood a transfer warehouse for transshipping freight between boats. Howlett's Mill was built as a canal warehouse at the west end of Commerce Street in 1842 and converted to a gristmill in 1863. Construction of the Chesapeake & Ohio Railroad grade obliterated Lock 28, the north canal basin, and the distillery site.