A survey commissioned by the Bishop of Durham, Thomas Hatfield, in 1345 mentioned a millpond here, and there is a 1398 reference to a water mill. A furnace to smelt iron was in existence by 1632 and it went on to become a fulling mill then a corn mill. A water wheel at Furnace Mill would have powered the bellows which provided the airflow for the blast furnace. Iron ore mined from surface workings on Hunwick Moor was smelted for around 50 years before the property became a fulling mill in 1687. Wool processing had become prominent in the Wear valley and there were several other fulling mills in the area, including one by the river in Durham City. The water wheel would have driven the machinery to pound the wool until technology made fulling mills redundant at the same time as agriculture was advancing. Furnace Mill therefore became a corn mill in 1828.