In the 1920s, State Highway 132 followed the old Route 43, which is now routes 43 and 63 between Cornwall and Canaan. The roads making up today's Route 132 were not state maintained.

The modern Route 132, commissioned in 1932, existed in Bethlehem only, running roughly 3.6 miles along today's alignment from Mill Pond Road to Cabbage Lane. The segment along Weekeepeemee Road in Woodbury was unposted SR 520. The rest of today's Route 132 was locally maintained.

In 1938, the state highway commissioner wrote: "Bethlehem, about 1 mile west of intersection with Route 61 to Bethlehem-Watertown town line."

In the 1940s and 1950s, Route 132 grew gradually, into Woodbury and Watertown.

Around 1941, Route 132 was extended west to Carmel Hill Road in Bethlehem, for a length of 5.56 miles. By 1944, its length was 7.94 miles, which likely extended from the Weekeepeemee / Carmel Hill junction in Bethlehem to the Watertown town line. In 1947, the state extended Route 132 into Woodbury along SR 520 to reach Route 47.

In 1955, Route 132 was extended into Watertown to end at Route 63.

However, in 1961, the state Route Reclassification called for Route 132 to be deleted from the state highway system. A shorter route along Flanders Road from US 6 to Route 61 was recommended, but ultimately not adopted.

On July 9, 1962, the state turned Route 132 over to the towns. Watertown protested this, and Bethlehem and Woodbury might have joined in. On October 15, 1962, the state accepted Route 132 back into the state highway system.

In November 2001, the Bethlehem Conservation Commission requested that Route 132 within town borders be designated a scenic road. However, the request was declined.

Trivia

The intersection of routes 132 and 63 in Watertown was long ago known as Judd's Corner. Many of these "corner" names are referenced in older documents as if those names would never disappear.