The village of Kerrs Creek, situated on the main western railway line, between Orange and Wellington, came into existence when the railway line was built in 1880. The district, however, had been settled at Caleula (on the main road) by CF Warne in 1838. By 1843, HH Kater had established a flour mill at Caleula and farmers, miners and innkeepers had come to the district. The village grew with the railway and farm workers living there and it was proclaimed a village on 8 November 1890. The school was established after 1883 and a Post Office in 1889.
In the 1950s and 60s, small holdings had already been incorporated into larger properties and employment on these and in the railways declined. The school closed in 1967 and the Post Office in 1985. The Bush Fire Brigade was amalgamated with Mullion Creek and Euchareena Brigades. The people who now reside in the village commute by car to work, mostly in Orange.