Despite its relatively small size, the waters of Peasey Beck have powered at least eight
watermills. Furthest upstream was Hutton mill (), just above Bridge End Bridge. A mill race left the river on its left bank and fed a mill much closer to the bridge. In the late 1600s, it was a corn mill and some of the first machinery for cleaning grain to be used in the region was described by Thomas Machell, the rector of
Kirkby Thore, who collected a huge amount of data about Cumbria until his death in 1698. At that time, the mill was used for grinding the barrels of guns as well as grinding, threshing and winnowing corn. It had become a bobbin mill and woollen
worsted mill by the mid-19th century, and was processing Italian
flax in 1885. At Beckside Bridge (), a weir and mill race was constructed for a corn mill which was by the bridge. Production of gunpowder for use in mines and quarries began in 1852 and around 20
tons were manufactured each week. It was shipped to northern England and Wales, and was also exported to West Africa and India. The site occupied around , with the area now occupied by Gatebeck Caravan Park and Millbrook Caravan Park being used first. Mills were built on both sides of Peasey Beck, which were linked together by internal tramways. Peasey Beck provided the power, but later on, steam engines were used. The finished product was packed into barrels, which were manufactured by Gatebeck Cooperage, and was transported to
Milnthorpe railway station by closed horsedrawn carts. From 1874, a tramway was used to move the gunpowder to the station. It ran alongside Peasey Beck to the A65 road, but motive power was still provided by horses, which were shod with brass shoes to prevent the risk of sparks. The site closed in 1937, the last such facility in the area to do so, and the caravan parks opened in the early 1970s. Kaker Mill () is known to have been in existence since 1184, and during the 14th century was worked by monks who owned Challon Hall. It was a corn mill, and closed during the Second World War. The wheel was fed from a weir at Challon Hall, which ran along the eastern edge of the road, and passed under the road near the mill. The mill race was supplemented by water from Birks Beck. At Park End Mill, just below Kaker Mill, marble was cut and polished. Crooklands Mill () started as a corn mill. The wheel was driven by a long leat which left the beck around upstream, and provided a fall of . From 1805 it was used to mill flax and to produce ropes. This continued for 50 years, and it was then used to produce bobbins for the Lancashire cotton industry, until its closure in the 1930s. The mill race ran along the right bank of the river, and the weir was just downstream of the point at which the Lancaster Canal feeder left the river. Both Millness Mill () and Milton Mill () were corn mills, and were fed by long leats. The weir for Millness Mill was next to Peasey Bridge, which now carries the A65 road. The mill race for Milton Mill started at the point where the tail race of Millness Mill discharged water back into the river. Milton Mill was a lowder mill, where the high breast-shot water wheel is located inside the building. An annular ring was attached to the side of the wheel, which meshed with a wallower, fixed to a vertical shaft. On the floor above the wheel, a great spur wheel was attached to the vertical shaft, and a triangular lowder frame carried three smaller cogs or stone nuts, which drove the three pairs of stones resting on the frame. A fourth pair of stones was added around 1900, giving the lowder frame a bulge on one side. When the mill was listed in 1962, the mill wheel and all of the machinery were still in situ, and this was still the case in 1978. ==Water quality==