Palermo Cemetery was operated for most of its existence by the Palermo United Church in the small village of Palermo, a stagecoach stop between Toronto and Hamilton.
In 1818, land owner Charles Teetzel sold the existing cemetery property to yeomen Duncan McQueen, James Hopperd and James McBride for "the sole and proper use of a place to bury the dead for them, and as many of the inhabitants of Trafalgar lying between the Twelve and Sixteen Mile Creeks as may think proper to join them; and, also for a Meeting House and a School House should the same at any time be required."
During the decades that Palermo Cemetery was operated by the church, the grounds needed constant restoration and upkeep. In 1926, cemetery caretaker John Hall was paid $75 a season. By 1976, remuneration for cemetery upkeep was $500. In 1945, a committee charged with the upkeep reported that they had to use sheep to keep the grass and weeds down, drawing several letters of complaint from families.
Familiar names that appear in Palermo Cemetery include Cudmore, Pell, Tovell, Inglehart, Fox, Sargant, Van Sickle, Hager, Dorland, Joyce, Gilbert and Secord.
The Town of Oakville assumed the operation and maintenance of the cemetery in 1990.