Archeological excavations in the early 1940's uncovered remains of a settlement from the Middle Bronze Period (third millenium BCE), pottery from the first century BCE, and pagan cult statues from Roman times. Ancient tradition, dating back from Theodosius (530 CE) identifies Ein Kerem as the birth place of John the Baptist, and with the location of the visit paid to Elizabeth, John's mother by her cousin Mary, Jesus' mother (Luke 1:39-80). The village's historical fame rests primamrily on this fact. A church stood there from Byzantine times and was visited by the author of the Kalendarium Hierosolymitanum. The crusaders also occupied the village and built a large church, soon destroyed in the eleventh century. The Russian Abbot Daniel wrote (1106-07) of two churches in Ein Kerem. The Franciscans established their first church in 1621, establishing a more permanent settlement in 1674. Medieval traveleers, whose pilgramage route usually followed the triangle Jerusalem-Ein Kerem-Bethlehem, wrote of the Church of Saint John and the Church of the Visitation.
The Franciscans remained the only foreigners in Ein Kerem until the middle of the nineteenth century. In 1860, the sisters of Our Lady of Zion settled in the village, to be followed by the nuns of the Russian Orthodox Church in 1871, the White Father in 1882, the Greek Orthodox Church in 1894, and the Rosary Sisters in 1911. During the Israeli War of Independence in 1948 the inhabitants of the village, mostly Arab, fled and were replaced by immigrants from Asian countries. In 1949, Rahel Yannait Ben Tzvi established the Ein Kerem Agricultural School, moving it from its previous location in Jerusalem. In 1964, many aritsts and academics settled in the village.
Today, Ein Kerem is most well known for its prestigious Hadassah Hospital, established in 1961, which also is home to the famous twelve Marc Chagall stained glass windows.