After the American Revolutionary War, in 1795, an Episcopal chaplain offered prayers at the beginning of the new state's first legislative session, and while one diocesan historian (the diocese originally comprised all of Kentucky) estimated that half of all early emigrants were Episcopalian, the church did not follow them for decades.

Williams Kavanagh, formerly a Methodist deacon but ordained by Bishop John Claggett of Maryland, held services in a log building at Louisville used by various Protestant faiths, before he moved to Henderson.

The following year, Benjamin Bosworth Smith arrived to become rector at Lexington's Christ Church, although he had previously declined the position.

[6] However, the diocese was the subject of a schism related to a new prayerbook, with adherents of the older Protestant practices withdrawing under assistant bishop George David Cummins.

The establishment of the new diocese took effect in 1895, when Dudley, who continued as Bishop of Kentucky, took Christ Church Cathedral in Louisville as the episcopal seat.