The town was founded by the VOC Dutch East India Company in 1786, being named after the then governor of Cape Colony,Cornelis Jacob van de Graeff, and his wife, whose maiden name was "Reynet".
In 1795 the burghers, smarting under the exactions of the VOC, expelled the Landdrost and proclaimed a republic. Similar action was subsequently taken by the burghers of Swellendam. Before the authorities at Cape Town could take decisive measures against the rebels, they were themselves compelled to capitulate to the British. The burghers having endeavoured, unsuccessfully, to get aid from a French warship at Algoa Bay surrendered to Colonel (afterwards General Sir) JO Vandeleur.
In January 1799 Marthinus Prinsloo, the leader of the republicans in 1795, again rebelled, but surrendered in April following. Prinsloo and nineteen others were imprisoned in Cape Town castle. After trial, Prinsloo and another commandant were sentenced to death and others to banishment. The sentences were not carried out and the prisoners were released, March 1803, on the retrocession of the Cape to the Netherlands.
In 1801 there had been another revolt in Graaff Reinet, but owing to the conciliatory measures of General F Dundas (acting governor of the Cape Colony) peace was soon restored. It was this district, where a republican government in South Africa was first proclaimed, which furnished large numbers of the Voortrekkers in 1835-1842.
The Cape Colony received a degree of independence in 1872 when "Responsible Government" was declared and, in 1877, the government of Prime Minister John Molteno began construction of the railway line connecting Graaff-Reinet to Port Elizabeth on the coast. This was officially opened on 26 August 1879.
Graaff Reinet became the centre of British military operations for the whole Eastern Cape during the Second Boer War. In 1901, a number of captured Boer rebels were tried in the town for crimes ranging from high treason, murder,
