In the fall of 1961, a group of ten families in New York City gathered together to begin planning a school. Influenced by the newly popular Montessori approach, they set out to provide a unique educational opportunity for the children by starting at the ground up. Caedmon was conceived as a lay Catholic school, but a school that would also be attractive to a diverse community of differing religions. The founding trustees included Marilou and William Doyle, Elizabeth and Vincent Connelly, Joyce and Daniel Flynn, Nellie and Thomas Mahoney, and Robert Hurley. The Caedmon School would be the first Montessori school established in New York City, and at that time, the second Montessori school in the United States.
The founders hoped to select a name that paid tribute to The Whitby School, the first Montessori school in the United States, so it was decided to name the school after Caedmon, the earliest of all recorded English poets. Caedmon was well known to have been buried in the English town of Whitby, after which the Whitby School had itself been named.
In 1969, Josephine Hartog assumed the position of head of school, which she held until 1974. She was succeeded by Nancy Rambusch, who led the school throughout the late 1970s. Rambusch who had been instrumental in the reintroduction of Montessori schools in the US by adapting the program to better fit American educational culture, had a strong influence on the development of the school. Also in the 1970s, Caedmon created what was, at the time, the first extended-day activities program among independent schools in Manhattan.
Carol Gose DeVine, was who had joined Caedmon in 1970, was named the Head of School in 1979. She held that position until 2007, making her one of the longest-serving heads of an independent school in the New York area. In the fall of 1994, the school approached interested families for help establish a fund to support diversity at the school.
In 2002, the National Association of Independent Schools' Leading Edge Recognition program recognized Caedmon with its Curriculum Innovation award. In 2005, the school opened a new gymnasium and science facility, and has since undergone renovation in the dining hall, the front lobby, and the entranceway.
During the 2012-2013 school year, Caedmon celebrated the 50th anniversary of its founding and welcomed new Head of School, Matthew Stuart.