The mouth of the Carmel River was first seen by Spanish explorer Sebastián Vizcaíno shortly before he landed in Monterey Bay in December 1602. He wrote about visiting the river on January 3, 1603, but greatly exaggerated its proportions, confusing later explorers. Later that winter the local springs near Monterey froze, and the explorers had to cross the peninsula to find freshwater. Fathers Junípero Serra and Juan Crespí moved Mission San Carlos Borromeo de Carmelo from Monterey to its present site by the Carmel River in 1771, they directed Indian laborers to dig ditches from the Carmel River to water their crops. The river has supplied ranchers and residents ever since. After railroad baronCharles Crocker built the Hotel Del Monte, he commissioned construction of the so-called Chinese Dam in 1883 on the upper river near present-day Cachagua. It supplied 400 acre-feet of water annually to the hotel. In his 1945 novel Cannery RowJohn Steinbeck wrote "The Carmel is a lovely little river. It isn't very long but in its course it has everything a river should have."
Etymology
Vizcaino named it Rio del Carmelo, likely because his voyage was accompanied by three Carmelite friars.
The Carmel River had three dams, with their reservoirs used for drinking water and having severe sediment buildup. The San Clemente Dam, built in 1921, was located upstream from the ocean, and once provided drinking water throughout the Monterey Peninsula. It was the second of three dams built on the Carmel River, preceded by the Old Carmel River Dam built in the 1880s and followed by the Los Padres Dam in 1949. The San Clemente Dam had an original capacity of, but as of 2002, the capacity had fallen to less than because it was 90 percent silted up. State regulators declared in 1991 that it was in danger of collapsing in an earthquake and spilling the of water trapped behind its crumbling walls. In January 2010 an agreement was reached with the California American Water Company to dig a new half-mile channel to bypass and strand the sediment behind the dam at a cost of $84 million, beginning in 2013. The Carmel River Reroute and San Clemente Dam Removal Project was completed at the end of 2015, opening up of historic steelhead rainbow trouthabitat on the river mainstem, plus access to three named tributary creeks: San Clemente Creek, Pine Creek and Cachagua Creek. The Los Padres Dam, built in 1949, is located upstream from the ocean. Its original capacity was, but as of 2008, its capacity was only. The oldest dam on the river, which was used as a turnout for a water pipeline, was located approximately downstream of San Clemente Dam. It was removed as part of the San Clemente Dam Removal Project. This first dam and associated pipeline was constructed ca. 1880 by Charles Crocker and the Pacific Improvement Company with a labor force that included approximately 700 Chinese workers. This small dam, which has been referred to as the "Chinese Dam" and "Old Carmel River Dam," was built using hewn and mortared granite blocks. A cast-iron pipe long and in diameter was used to deliver water from the dam to the first Del Monte Hotel on the Monterey Peninsula, crossing the Carmel River five times on its way. Remnants of the original iron pipe still exist along Carmel Valley Road, but no records have been found to show where the pipe crossed the river.