[5] An Aboriginal presence has been attested archaeologically to go back at least 4,000 years, according to the analysis of the materials excavated at the Clybucca midden, a site which the modern-day descendants of the Djangadi and Gumbaynggirr claim native title rights.

[citation needed] Middens are attested in the Macleay Valley, together with remnants of a fish trap in the Limeburners Creek Nature Reserve and, just slightly north of Crescent Head, at Richardsons Crossing, there is a bora ring.

[citation needed] White presence on the Djangadi lands first took off as mostly ex-convict cedar cutters, based at a camp at Euroka Creek established by Captain A. C. Innes in 1827, began exploring the rich resources of the area in the late 1820s.

[citation needed] The first European settler in the Kempsey district was named Enoch William Rudder, in 1835, who had purchased a land grant of 802 acres (325 ha) from its first owner, Samuel Onions.

[citation needed]In 1836, runs held by squatters lying outside the sphere of colonial jurisdiction were absorbed into the southern legal framework.

[6] Within a decade the timber cutters had virtually harvested every stand of this highly prized red gold timber in clearances that made the land increasingly attractive to pastoralists, [20] who by 1847, after the passage of the Imperial Waste Lands Act of the preceding year, and the implementation of the Orders-in-Council (1847) had established 31 stations along the Macleay river from Kempsey inland to Kunderang Brook.

[citation needed] This coincided with one of the most violent and sustained examples of warfare in the Macleay gorges, during which it is estimated that around 15 massacres took place in the region targeting Aboriginal people of the area.

[citation needed] The Djangadi and other tribes affected adopted guerilla tactics to fight the usurpation of their land, by attacking shepherds, hit-and-run raids on homesteads and duffing sheep and cattle livestock before retreating into the gorges where pursuit was difficult.

Eventually the Djangadi moved to Kinchela Creek Station though an unofficial camp remained at Green Hills, resisting attempts to have them relocated, until they were placed under the administration of a white manager at Burnt Bridge Reserve.

[citation needed] In the 1967 referendum on whether Indigenous people should be counted in the census of the Australian population, Kempsey had the highest number of 'no' votes in the country.

He arrived from Birmingham in 1834 and bought land on the southern bank of the river in 1836, at what was then the limit of authorised settlement (the boundary of County Macquarie).

[8][9] The main (and most flood-prone) part of Kempsey was founded by John Verge, sub-dividing a grant on the flood-plain opposite Rudder's settlement.

Large reserves of Australian red cedar Toona australis, (sold in Britain and the US as "Indian mahogany") were extracted down until the 1920s, and with greater difficulty until the 1960s, by which time the resource was effectively exhausted.

The shire council has a policy of buying up land in areas designated as flood plains and many houses have been transported to higher ground in recent years.

[19] Despite a period of economic stagnation in past decades [citation needed] compared to nearby coastal centres of growth, Kempsey has a growing local economy based on tourism, farming and service industries.

[20] A Coles supermarket development (known as the "Kempsey Central Shopping Centre") has been built and is situated where the Tattersalls Hotel and various small businesses were in Little Belgrave Street.

A local team, the Macleay Valley Mustangs, play in the Group 3 Rugby League competition, with their home ground being Verge St Oval.

[citation needed] In 2015 it was reported in the Sydney Morning Herald that Kempsey was experiencing violent crime linked to ice addiction.

Opened in July 2004, the Mid North Coast Correctional Centre, a minimum to medium prison for 500 male and female inmates, is located in Aldavilla, approximately 14 kilometres (8.7 mi) west of Kempsey.

Tom Keneally's novel A River Town, (1995), a mystery novel centred on the lives of an Irish settler Tim Shea and his family in the period on the eve of Federation, is set in Kempsey.