The village takes its name from the 12th-century castle which stood about to the north. The 14th-century market cross, erected when the privilege to hold a weekly market in Castle Combe was granted, stands where the three principal streets of the lower village converge. Next to the cross is one of Castle Combe's two village pumps. Small stone steps near the cross were for horse riders to mount and dismount, and close by are the remains of the buttercross, built in the late 19th century from old masonry. The market town prospered during the 15th century when it belonged to Millicent, the wife of Sir Stephen Le Scrope and then of Sir John Fastolf, a Norfolk knight who was the effective lord of the manor for fifty years. He promoted the woollen industry, supplying his own troops and others for Henry V's war in France. The parish was in the ancient hundred of Chippenham. Notable houses include the Dower House, from the late 17th century and now Grade II* listed. A National School was built in 1826, on a site between the upper and lower villages. The school was taken over by the county council in 1909, and educated children of all ages until 1956 when older pupils were transferred to secondary schools in Chippenham. It closed in 1998 on the opening of a new primary school at Yatton Keynell.
The first chapel was built in 1757 and extended with a schoolroom in 1846. The current church, opened in 1914, is in the upper part of the village on what is now the B4039 road. The building is a former malt house and is attached to an 18th-century house which became the manse. The church continues in use.
The village was a location for the 1967 film musical Doctor Dolittle, but its frequently rainy summer climate, and the residents' irritation at the producers' modifications of the area for shooting that was severe enough to incite attempted sabotage – including by British Army officerSir Ranulph Fiennes – frustrated production. Other productions include "The Murder of Roger Ackroyd", an episode of Agatha Christie's Poirot, and the films Stardust and The Wolfman. Throughout September 2010, the village was a key filming location for Steven Spielberg's production of War Horse. Raymond Austin set the action of his book Find me a Spy, Catch me a Traitor in the village and at the Manor. The house of Alice Cartalet in the manga and anime series Kiniro Mosaic was based on Fosse Farmhouse, a guesthouse near Castle Combe. The village was a filming location for the fantasy adventure movie Mariah Mundi and the Midas Box in 2012, and later for a series of Downton Abbey.
Castle Combe has a car park at the top of the hill, and toilet facilities over the bridge at the bottom of the village. There was a small museum but it closed in 2012. The 5-star Manor House Hotel is in the west end of the village. The house was built in the 17th century and rebuilt in the 19th. It has 48 rooms and of gardens. During World War II, the New Zealand Forestry Officers had the Manor House as their headquarters. In 1947, the owner of the Castle Combe estate sold the houses of the estate and the Manor House became a country club. After 18 months the club left the premises, and the house was shortly thereafter sold to Bobbie Allen, an amateur hotelier, and her husband. Over time, they established the Manor House as a premier country hotel, run almost as a club, which attracted quite a glamorous clientele. Certain of the London hotels would refer guests in search of authentic England to the Manor House. Mrs. Allen was a noted horsewoman, and the grounds of the Manor House were known for their suitability for riding. Mrs. Allen was from Lancashire, and quite direct. She wrote a book of her experiences, From Claridge's to Castle Combe, which reflects this directness. After many years, the Allens sold the Manor House to Mr. and Mrs. Oliver Clegg, who sold it to the present owners.
