[2] An early 13th-century charter from nearby Dodnash Priory was the first to mention it by its current name, derived from the Norman-French and Welsh capel, meaning chapel.

Tentative evidence of Bronze Age habitation has recently been unearthed just outside the boundaries of the village,[3] and well-documented human settlement in the area dates from the Roman period.

[4] Evidence of a villa was found while building council houses on Windmill Hill at the west end of the village in the 1930s, with remains of a kiln nearby and smaller artefacts such as coins and tiles.

The village was birthplace in 1859 of Lieutenant-General Sir Edwin Alderson, first commander of the Canadian Expeditionary Force of World War I.

Men from the village were involved in two local Auxiliary Units, Wenham and Capel, part of the 202nd battalion of the Home Guard.

[8] The Capel unit was based in woods near Bentley; the three dugouts at their disposal housed ammunition, a field telephone, and their supplies of gelignite and plastic explosive.

The new houses were built with an open-plan design: front gardens were not to be enclosed, and grass verges were to separate fences from the pavement.

The large playing field which includes football pitches, tennis courts, a cricket ground and a bowling green.

These are maintained by the Capel Community Trust There is a Scout troop based in the village, with its own HQ and close to 100 members in January 2013.

Roman Catholic services were also being conducted in St Mary's, but declining numbers of priests meant this ceased to be feasible.

[19] According to the 2001 UK census, the employment of residents aged 16–74 was 16.2% retail and wholesale, 13.3% property and business services, 11.4% transport and communications, 10.9% finance, 9.7% manufacturing, 8.1% health and social work, 6.9% education, 6.1% construction, 5.7% public administration, 5.3% hotels and restaurants, 1.4% agriculture, 1.3% energy and water supply, and 3.8% other.