Oudtshoorn is situated in the Klein (little) Karoo. The name was given to this area by its original residents the bushman (san), who have left behind rock paintings in the nearby Swartberg Mountains.

The Little Karoo is a fertile inland plateau wedged between the Swartberg in the north and Langeberg and Outeniqua Mountains in the south.

Oudtshoorn is the central town of the region.

The first known Europeans to reach the little Karoo was a trading party led by a certain Ensign Shrijver, who were guided there by a Griqua via an ancient Ekephant trail in January 1689.

The area was only settled a hundred years later as a farm named Hartenbees Rivier.

In 1839 the first large permanent structure, a Dutch Reformed Church was build near the banks of the Grobbelaars River, the land was given by Cornelius Petrus Rademeyer.

The town that gradually grew around the church, were initially known as Veldschoendorp, was given the name Oudtshoorn by the magistrate of George, in the memory of the daughter of Baron Pieter van Rheede van Oudtshoorn. Baron Pieter van Rheede van Oudtshoorn was appointed as the Governor of the cape colony, but died aboard ship before his arrival in Cape Town in 1772.

Over the following decades nothing really happen, though in 1858 a small school was opened, followed by the development of a municipality, the founding of an Agricultural community and work on a larger church to replace the original.

In 1859 a long serious drought started which severely depressed the South African economy leading to serious poverty. In 1869 the drought was finally ended by floods. With the depression lifted, Oudtshoorn was transformed from a struggling village to a town of great success over the following decades.