The cemetery was established in 1857 and is named after Brigadier-General John Nicholson, a Victorian era military officer who played a pivotal role during the Indian Rebellion of 1857.

The church along with cemetery, St. Stephen's hostel, and the Victorian era houses of Kashmere Gate neighbourhood were once considered to be a "centripetal" part of Christians in Delhi.

[3] Nicholson Cemetery is located in Kashmere Gate near metro station and west of Inter State Bus Terminal.

[8] The Indian Rebellion of 1857 began as a mutiny of sepoys of the East India Company's army on 10 May 1857, in the town of Meerut, and soon escalated into other mutinies and civilian rebellions largely in the upper Gangetic plain and central India, with the major hostilities confined to present-day Uttar Pradesh, Bihar, northern Madhya Pradesh, and the Delhi region.

[8] The number of casualties resulted from the Siege of Delhi created the rising demand for a Christian cemetery in the area.

A white marble slab from the Red Fort was taken to build his tombstone and epitaph on it reads:[7][10] The grave of Brigadier General John Nicholson who led the assault of Delhi but fell in the hour of victory mortally wounded and died 23rd September 1857 aged 35The British High Commission in India renovated the cemetery in 2006.