The valley that runs behind the present day cemetery was named Caterpillar Valley by British troops. It was from here that soldiers of the 9th (Scottish) Division attacked at dawn on 14 July 1916, capturing the ground on which the cemetery now stands. Fierce fighting over the following months for Delville Wood to the east and High Wood to the north-west, saw the surrounding landscape transformed into a wasteland of shattered trees and shell holes.
German forces retook this area in their 1918 spring offensive and the first burials were made here in late August 1918 when the 38th (Welsh) Division recaptured this ground and buried some 20 of their fallen comrades in what is today Plot 1.
After the Armistice the cemetery was greatly enlarged with many thousands of graves brought here from the surrounding battlefields.
The cemetery was designed by Arthur James Scott Hutton, who served with the Royal Engineers during the war, and Sir Herbert Baker. This is now the final resting place of more than 5,570 servicemen, of whom nearly 3,800 remains unidentified.
In 2004 the remains of an unknown New Zealand soldier were exhumed from the cemetery and laid to rest in the Tomb of the Unknown Warrior in Wellington, New Zealand. A special headstone marks his original resting place in Plot XIV, Row A, Grave 27.