In 1871, the Virginia General Assembly passed a bill establishing public schools; prior to 1871, localities had only private schools. Waterford's first private school, the Friends' Meeting School on Loyalty Road, was established in 1805-1806 with a donation by local merchant John Williams.

In 1877, Edwin Atlee sold one and one half acres at Fairfax and High Streets to school trustees of Jefferson District for $350 for construction of a public school. Waterford Academy, built in 1880, was destroyed in February 1909 by a fire started when a custodian cleaning stoves left a bucket of hot coal ashes on the wooden floor. Classes were held in the Baptist church basement until a new school was completed.

The new school, which opened for the 1910-1911 session, was built at a cost of $6000 with funds secured from private donations, insurance, and state literacy fund. The main building was a two-story, three-bay framed structure; an auditorium was added in 1928. School facilities also included horse stables, the stalls of which were leased by parents whose children rode to school. This school served as a public elementary school for first through seventh grades until 1965, when the current facility on Loyalty Road opened.

In 1966, the Waterford Foundation purchased the old Waterford School property from the Loudoun County School Board. Since then, the facility has served as exhibit space, reception hall for weddings, and a space for New Year's celebrations and craft classes. On 25 January 2007, a fire destroyed the auditorium, but left the original 1910 structure unharmed.