The town was founded in 1699 by
French Huguenots fleeing persecution in France. Though initially named Sieburg, the town was later named after
Charles I, Landgrave of Hesse-Kassel, who granted them refuge. The German Huguenot Museum located here contains a picture archive, library, and family histories of the Huguenots in Germany. Charles I, Landgrave of Hesse-Kassel, had ambitious plans for town-planning and developing new water trade channels in the region; including a 'haven' in Karlshafen. Together with his engineer and architect Friedrich Conradi he developed plans for a Landgrave-Carl-Canal in order to avoid customs duty at
Hannoversch Münden, but these were never finalised. Plans for Bad Karlshafen, however, were partially completed in a baroque style by architect
Paul du Ry in 1717 and the town was renamed as Carlshaven. Between 1685 and 1750, hundreds of Waldensians from Northern Italian ethnic enclaves hailing from the Piedmont Valleys in the Kingdom of Savoy-Piedmont-Sardinia existed in Carlshaven. Following the Revocation of the Edict of Nantes in France in 1685, the Kingdom of Savoy-Piedmont-Sardinia followed suit along with their ally and banished its Waldensian population, during which time, many of these diasporic Northern Italians existed in "ghettoized" ethnic enclaves in Hesse Cassel. Since 1977 Karlshafen has spa status, which is when it received the title 'Bad'. ==Mayor==