Kandersteg is first mentioned, together with Kandergrund, in 1352 as der Kandergrund.
Prehistorically the area was lightly settled. However, several late-neolithic or early Bronze Age bows have been found on the Lötschberg glaciers and a Bronze Age needle was found in the Golitschenalp. From the Roman era a bridge and part of a road were discovered in the village.
Until 1909 Kandersteg was politically and religiously part of Kandergrund. In 1511 the parish built a chapel in Kandersteg, which survived the iconoclasm of the Protestant Reformation in 1530. It became a filial church of the parish in Kandergrund between 1840 and 1860 and in 1910 became the parish church of the Kandersteg parish. A Roman Catholic church was built in 1927.