Lebanon was incorporated as a borough by an Act of the New Jersey Legislature on March 26, 1926, from portions of Clinton Township, based on the results of a referendum held on April 20, 1926. Additional portions of Clinton Township were annexed in 1962.
Lebanon is located north of the Round Valley Reservoir. The Borough was known in the early part of the 19th century as Jacksonville and later as Lebanonville, Lebanonville Depot and finally Lebanon, a station on the Central Railroad of New Jersey. The center of Lebanon has changed little in the past century. The Dutch Reformed Church is one of the oldest churches in the County. Records of the church begin in 1769, however, the church is cited as early as 1747.
As of the census of 2000, there were 1,065 people, 458 households, and 287 families residing in the borough. The population density was 1,227.3 people per square mile (472.6/km²). There were 477 housing units at an average density of 549.7/sq mi (211.7/km²). The racial makeup of the borough was 95.40% White, 0.66% African American, 0.19% Native American, 3.10% Asian, 0.38% from other races, and 0.28% from two or more races. Hispanic or Latino of any race were 2.07% of the population.
There were 458 households out of which 30.8% had children under the age of 18 living with them, 50.4% were married couples living together, 9.6% had a female householder with no husband present, and 37.3% were non-families. 33.0% of all households were made up of individuals and 10.5% had someone living alone who was 65 years of age or older. The average household size was 2.33 and the average family size was 2.97.
In the borough the population was spread out with 24.1% under the age of 18, 3.7% from 18 to 24, 35.1% from 25 to 44, 25.4% from 45 to 64, and 11.6% who were 65 years of age or older. The median age was 39 years. For every 100 females there were 92.2 males. For every 100 females age 18 and over, there were 82.4 males.
The median income for a household in the borough was $68,542, and the median income for a family was $83,436. Males had a median income of $52,316 versus $37,396 for females. The per capita income for the borough was $34,066. About 0.7% of families and 3.6% of the population were below the poverty line, including 2.0% of those under age 18 and 5.1% of those age 65 or over.
The Lebanon station offers service on New Jersey Transit's Raritan Valley Line. There is a station building on the south side of the tracks. The northern track is no longer in use and the stop has limited weekday and no weekend service.