Although Great Britain had exercised authority over "Madawaska" since its founding in 1785 (administering it as a part of New Brunswick), jurisdiction over the entire territory was disputed due to the ambiguous wording of the 1783 Treaty of Versailles that set the boundary between the United States and British North America (Albert [1920] 1985: 90). In addition to the ambiguity, there was great interest in the timber resources of the region by both Americans and Britons, and logging operations were underway on both sides of the river when the State of Maine was created in 1820. In 1826, logging licenses were suspended pending settlement of the border dispute (Craig 1988: 130). The conflict that arose during the following years was a source of hostilities between Great Britain and the United States that ranged from a brief period of armed conflict in the "Bloodless" Aroostook War, to several years of often acrimonious diplomatic disputes and negotiations in state, provincial, and national capitals (McDonald 1990).

John Baker, one of several Americans from the Kennebec Valley who had begun moving into the Upper St. John Valley in 1817, became one of the standard-bearers for claims to the area by Maine and the United States (Albert [1920] 1985: 92-93). On July 4, 1827, Baker organized an Independence Day celebration from his home on the north shore of the river and raised an American flag to challenge British authority (Dubay 1983: 26-27). In late September that same year, Baker, an American citizen, was arrested, tried, in Fredericton, New Brunswick, and sentenced to three months of imprisonment for rebellious activities. Prompted by the arrest and desiring to establish the sovereignty of Maine, the newly installed state government sought action from the federal government in Washington.

The Governor of New Brunswick, Sir John Harvey, visited the disputed territory and reported in 1839, "the Acadians of Madawaska have manifested to me on numerous occasions (and again very recently) their unanimous and spontaneous desire to remain under the jurisdiction of New Brunswick" (Albert [1920] 1985: 100). Writings from the period indicate the inhabitants feared that they might lose possession of their lands if their territory became a part of the United States (Dubay 1983: 29).

Whatever the wishes of the inhabitants, the boundary dispute was settled through diplomacy and arbitration. The matter was resolved in 1842 when Lord Ashburton of Great Britain and Daniel Webster of the United States negotiated a treaty (known as the Webster-Ashburton Treaty) that established the St. John and St. Francis rivers as the international boundary above Grand Falls.

Following the border settlement, some settlers arriving from Lower Canada preferred to remain on the New Brunswick side rather than cross into Maine (Albert [1920] 1985: 116). Due to a reduction in immigration, population increase was slower on the American side during the 1840s and 1860s. The settlement of the Maine side of the valley did, however, continue to expand. Allen (1981: 87) summarizes the expansion as follows:

Some people moved up the Fish River along a newly created road to the south. Also, by the 1850s logging trails penetrated the broad hill country east of Frenchville, and after 1860 this area received its first farm families. Ultimately, these back settlements would be spread over the land some ten miles south of the river. By 1892, the settlement encompassed Hamlin on the east and St. Francis on the west, but the general direction of the expansion was to the south. Wallagrass, Eagle Lake, and Winterville were then well populated.

Expansion to the southeast brought people of French descent in contact with English-speaking settlers in eastern Aroostook County, and with Swedish immigrants who had founded the town of New Sweden (1871) and later the town of Stockholm. On the western extremity of French settlement in the Valley, near the mouth of the St. Francis River, the French population came in contact with English-speaking loggers of Scots-Irish descent who had migrated there from New Brunswick (Allen 1981: 87).

According to William Ganong (1901) the Webster-Ashburton Treaty of 1842, which gave approximately two-thirds of the disputed territory to the United States, was actually favorable to Great Britain because, based on the wording of the Treaty of Versailles, the State of Maine had a strong claim to the entire territory. However, the boundary settlement was unfortunate in that it divided a compact and homogeneous population between two governments and created an "unnatural" territorial boundary. Today Maine Acadians generally ignore the international boundary with regard to family and social ties. Yet, the St. John River has formed a portion of the northern border of the United States since 1842. Maine Acadian identity has come to embrace being both "American" and "Acadian."