Caribou Crossing was named after the migration of huge numbers of caribou across the natural land bridge between Lake Bennett and Nares Lake. That caribou herd was decimated during the Klondike Gold Rush, but a recovery program raised the number of animals to about 450.

The modern village began in 1896, during the Klondike Gold Rush. At the time, Caribou Crossing was a popular stopping place for prospectors going to and from the gold fields of Dawson City.

In 1904, Caribou Crossing was renamed Carcross as a result of some mail mix-ups with the district of Cariboo in nearby British Columbia, Canada.