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Paterson is a small township in the lower Hunter Region of New South Wales, Australia. Located within Dungog Shire and City of Maitland, it is situated on the Paterson River. It is in the middle of what was once dairy, timber and citrus country and is now more significantly a feeder town for the nearby mining industry in the Upper Hunter and the city of Newcastle. It was named after one of the first known Europeans in the area was Colonel William Paterson in 1801 surveyed the area beside the river.

It is approximately 15 minutes drive north along either Tocal or Paterson Roads from the nearest major township of Maitland. Paterson railway station lies on the main North Coast Railway Line between Sydney and Brisbane with daily services north to Dungog and south east to Newcastle. Adjoining areas include Duns Creek, Martins Creek and Vacy.

The area was once occupied by the Wonnarua and Worimi peoples, who are Aboriginal Australian groups. The first official European in the area was the man whose name the town was to adopt, Colonel William Paterson, who, in 1801, surveyed the area beside the river that Governor King named in his honour. As with so many colonial settlements, timbercutters, after local supplies of red cedar, followed in the footsteps of the explorers and surveyors. Indeed, the Hunter River, into which the Paterson River flows, was then known as the Cedar Arm due to the abundance of timber.

In 1812, four convicts (Swan, Pell, Davis and Swan) and John Tucker jnr were permitted by Governor Macquarie to commence farming on the Paterson River at "Patersons Plains", a location that came to be known as "Old Banks", as a special reward for supplying the Government with 500 cedar logs. Old Banks, in an area first surveyed by Henry Dangar in 1822–23, was the true genesis of rural settlement outside of the Sydney basin. It grew to eight farms along the river by 1818, six of them belonging to convicts. This fledgling farming community subsisted under the oversight of the locality's military station and lock up established at the river's crossing point. Commandant Morrisett established (c.1818) the first Magistrate's Court above Newcastle in his Commandant's Cottage that he constructed at Old Banks on the farm of Pell (d.1815). However, from the early 1820s, the prominence of Old Banks as the Government's primary frontier seat of Government, and the 'original' Paterson, waned as a consequence of the establishment (from c.1818) and prolific growth of the Government's rural settlement and township at Wallis Plains (now East Maitland) ten kilometres to the south. With the construction of an overland route direct to north western Sydney in 1823, Wallis Plains and the deep river port of Morpeth became the centre of the Lower Hunter Valley's connections with Sydney and the penal settlement at Newcastle. Even so, the military outpost at Old Banks (along with a similar facility 14 kilometres to the east at Seaham on the Williams River) continued to provide for the interception of escaped convicts from Port Macquarie, the imposition of law and order for the Paterson region and the oversight of a most important centre for transportation of goods, chattels and people. The first land grant in the area was made to Captain William Dun in 1821 on land a few kilometres to the north of Old Banks. In 1822, when the area was formally opened up to settlement, James Webber established "Tocal" on his land grant immediately to the north west of Swan's farm; Tocal to become among the most successful of the farming establishments on the lower Paterson River. In 1823, Morrisett's Government Cottage and associated infrastructure was made available to Timothy Nowlan as the base for his Government sponsored sheep breeding 'experiment', and family home. A one mile square area situated to the west of the river at Old Banks (and about 800m distant from the river and to the south of Tocal) was identified as a possible township by the early 1830s. However this was not developed in favour of the present township site.

There is an active historical society that maintains sites of historical importance in the area. The society has a museum collection in the Paterson Court House that is open once a week. The area is also serviced by Paterson Public School, and the local newsletter The Paterson "Psst". During March, Paterson holds an annual festival at Tucker Park, with market stalls and local produce. The nearby Tocal Agricultural College holds a small farms Field Day on the first weekend in May, showcasing the college and local agricultural interests. Paterson Classic Car show is held mid September with a mixed collection of vintage cars, trucks and bikes, with market stalls and live music throughout the day. Also Paterson Gallery hosts a collection of talented local artworks available for purchase, celebrating an open night the first Friday of every month with an open invitation to all. The Rail Motor Society is located opposite Paterson railway station.

Bushranger Captain Thunderbolt's wife, Mary Ann Bugg (one of two known women bushrangers), was tried at the Paterson Court House during the 1860s.