The first settlements in area of Karpacz are noted by the official website of the city as being of probable Celtic origin and date to the 4th or 3rd century BC when they inhabited the region as part of gold digging taking place in the area. The first mention of permanent location within the current boundaries of the town is dated to the beginning of 15th century and connected to destruction of village called Broniów, whose inhabitants moved to settle the area currently located at the altitude of town's railway station.
The settlement is mentioned in 1599 because of lead and ironmining. Since the construction of Krummhübel's first railway connection in 1895 history was connected with the development of metallurgy industries and with the progress of tourism. The ethnically German village was part of Austria and Austria-Hungary in 1526-1742, the Kingdom of Prussia in 1742-1870 and then Germany between 1871-1945. Krummhübel's German population was forcibly expelled from the village between 1945 and 1947. The town was subsequently repopulated with ethnic Poles and eventually renamed Karpacz — an allusion in Polish to the Carpathian Mountains, from which some of the new settlers hailed.