Seeheim was founded in 1896 as a base for the German Schutztruppe. Early in the 20th century its sole purpose was that of a junction station where the lines from Keetmanshoop diverted to Lüderitz and Karasburg. The line Keetmanshoop-Lüderitz was built from 1905 to 1908, the line Keetmanshoop-Karasburg in 1909. The First World War was the reason to build these railway links through inhospitable land but the main use was soon the peaking transport demand triggered by the diamond rush that developed after a railway worker picked up a diamond near Grasplatz station, 24 kilometers east of Lüderitz. However, people travelling from the inland to Lüderitz had to stay overnight at Seeheim junction. This was the reason for the erection of two hotels, one of which is again in operation today after standing empty for 30 years.
In the 1950s, Seeheim was a settlement of considerable size. Afterwards, the town gradually fell into decline. The school closed down and the residents began to leave