In 1815 the Sherwood tavern was leased to a firm named Coe & Marsh, who sold it in 1833 to William Fuller, who had worked previously for Sherwood. Fuller kept the tavern for seven years and sold it to Colonel Alfred Lamb in 1840, when it became Lamb's Hotel. The colonel decided to rename the hotel the Houndayaga House in 1845. The townspeople were more interested by the sign on the front of the inn simply stating "The Lamb."

Near the end of the Civil War a successful carriage manufacturer named John Packwood bought and renovated the tavern, adding a third floor, east and west wings and a balcony. Packwood spent approximately $20,000 on this renovation which was a rather large sum by the day's standards, so it was fitting that the Inn was named the Packwood House.

Trolley in downtown Skaneateles at the turn of the century

Packwood continued the business until 1874 when the hotel was sold to F.A. and Edward A. Andrews. Edward Andrews successfully managed the Inn for 45 years, the longest single ownership in the Inn's history. The story goes that Andrews had one long-term resident, Ms. Fannie Gilford, after she was frightened out of her home on Hannum Street and simply refused to ever return.

During the 1918 influenza epidemic the Packwood House was converted into a temporary hospital, supplied with food and medical provisions by the residents of Skaneateles. The Inn was then put up for auction, but finally sold back to the holder of the mortgage, Mrs. Austin, on a foreclosure sale for $8,000. In the following years the inn was operated by John Breslin as the Breslin House and then by E.C. Lon Ergan who restored the name of the Packwood House.

Henry Horsetman and Bert Sailen purchased the Inn in 1923, changing the name to Kan-Ya-To Inn. The name and fame of the Inn attracted thousands of tourists each summer, year after year, until food and labor shortages finally forced the closing of the dining room at the onset of the Second World War.

When Chester Coats and his wife bought the Inn in 1945, one of the first and most important special events of the year was a dinner in honor of General John Mathew Wainwright, the military hero of Bataan and Corregidor. Coats quickly changed the Inn's name from Kan-Ya-To back to the original Sherwood Inn after overhearing it referred to as "that nice little Japanese place" when Japanese-American relations did not enjoy the close ties we have today.

The Inn continued under Coat's management until 1971, when it became property of the Skaneateles Holding Company, formed to keep this fine Inn operational.