In the early days, it was believed that Caroline was the scene of many buffalo hunts. In 1904, settlers began to arrive and settle the land. In 1908, H. A. Langley settled near the South of the Raven River where he opened the first store and post office. The post office was named after his only daughter, Rebecca Caroline Langley. The village later became known as Caroline as people addressed their mail with the name. The store was to become the focal point for the community. In the 1940s, cash was still rare and people traded with the store by bartering fur, eggs, butter and lumber among other things.
The government and the Canadian Pacific Railway (CPR) began to advertise the land between Calgary and Edmonton. Many settlers arrived and set up tents, underground dugouts, log houses and shacks. The clearing of land, which was covered with poplar and willow trees, was done by ox and saw. In 1954, electricity came to the village. On January 30, 1952, Caroline became a village.