[2] The area around modern Nishikatsura has been settled since prehistoric times, and developed from the Sengoku period, as a hamlet on the pilgrimage route to Mount Fuji.

During the Edo period, all of Kai Province was tenryō territory under direct control of the Tokugawa shogunate.

Per the early Meiji period establishment of the modern municipalities on July 1, 1889, the village of Katsura was created within Minamitsuru District, Yamanashi Prefecture.

It was renamed Nishikatsura on June 3, 1893 after expansion through annexation of portions of neighboring villages, and was raised to town status on September 15, 1952.

Nishikatsura is home to numerous small textile plants, which manufacture neckties and umbrellas.