The town was founded by Compagnie de Saint-Domingue in 1698 as the capital of the south eastern part of the French colony Saint-Domingue. The area now called Jacmel was Taíno territory of the Xaragua chiefdom ruled by cacique Bohechio. With the arrival of the French, and the later establishment of the town, the French renamed Yaquimel as Jacmel.

City was developed to boost the sugar production and trade but soon it evolved as coffee trading centre. In 1896 it suffered in a major fire, which destroyed most buildings in the city. Soon after Jacmel was rebuilt, often using prefabricated cast-iron pillars and balconies shipped over from France.[3] Many ornate mansions of wealthy coffee merchants from this time have been preserved up to this day without much change and the whole central part of the city has little changed over the last 100 years.

The mansions of Jacmel with their cast-iron furnishings would later come to influence the home structure of much of New Orleans. Today, many of these homes are now artisan shops that sell vibrant handicrafts, papier-mâché masks and carved-wood animal figures. In recent years, efforts have been made to revitalize the once flourishing cigar and coffee industries. The town is a popular tourist destination in Haiti due to its relative tranquility and distance from the political turmoil that plagues Port-au-Prince.