Prior to the Croatian War (1991-95) the village was a part of the municipality of Knin, and according to the census of 1991, it had a population of 477 people. During the war, Varivode and the surrounding area were occupied by the Republic of Serbian Krajina, a Serb break-away state. On 28 September 1995, almost two months after Operation Storm, the Varivode massacre was committed by men in Croatian military uniforms and armed civilians who killed between 9 and 12 elderly Serb civilians, some of whom disabled.
In 2010 in village was erected monument civilians who were killed in Varivode incident. Cross on monument was demolished in April 2010. In October of the same year monument was re-appointed in the presence of President of Croatia Ivo Josipović and Serbian Minister for Diaspora Mlađan Đorđević. The inscription on the monument write "To innocent and brutally murdered villagers of Varivoda from 28 September 1995" (Serbian Cyrillic:Недужним и мучки убијеним мјештанима Варивода 28. 9. 1995.).
Every year during the summer months, Varivode receives Serbs from around the world who return to their motherland. The's village patron saint is St. Elias (Sveti Ilija), celebrated on the 2nd of August.
In the 2011 Croatian census, Varivode had 124 inhabitants. According to 2001 Croatian census, Varivode had 93 inhabitants. In 1991, there were 477 inhabitants, out of whom 472 were ethnic Serbs.
- Government of Croatia (October 2013). "Peto izvješće Republike Hrvatske o primjeni Europske povelje o regionalnim ili manjinskim jezicima" (PDF) (in Croatian). Council of Europe. p. 36. Retrieved 30 November 2016.
- "Population by Age and Sex, by Settlements, 2011 Census: Varivode". Census of Population, Households and Dwellings 2011. Zagreb: Croatian Bureau of Statistics. December 2012.
- Christiane Amanpour (4 October 1995). "Croats accused of atrocities against Serb civilians". CNN. Retrieved 8 October 2012.
- Chris Hedges (5 October 1995). "9 Aged Serbs Found Slain In Croat Town". New York Times. Retrieved 8 October 2012.
- "Croats Leave Bloody Trail of Serbian Dead". The Chicago Tribune. 9 October 1995. Retrieved 29 November 2012.
- "Croatia Admits Serb Civilians Were Killed". Los Angeles Times. 3 October 1995. Retrieved 29 November 2012.
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