What is now Krasny Kholm was first attested as the village of Spas-na-Kholmu as early as 1518. The village belonged to the Antoniyev Monastery of St. Nicholas until its lands were secularized in 1764. In the course of the administrative reform carried out in 1708 by Peter the Great, the area was included into Ingermanland Governorate (known since 1710 as Saint Petersburg Governorate), but in 1727 it was transferred to Moscow Governorate. In 1775, Tver Viceroyalty was formed from the lands which previously belonged to Moscow and Novgorod Governorates, and in 1776, Krasnokholmsky Uyezd was established as a part of Tver Viceroyalty. In 1776, the village was granted town status and received its current name. In 1796, the viceroyalty was transformed into Tver Governorate; Krasnokholmsky Uyezd was abolished, with its territory transferred to Vesyegonsky Uyezd. The railway between Rybinsk and St. Petersburg reached the town in 1899, boosting its development.