Fort Beaufort was founded as a military frontier post by Colonel Maurice Scott in 1822, and the British named it Fort Beaufort in honour of the Duke of Beaufort, father of Lord Charles Henry Somerset, first British governor of the Cape Colony in the early 1800's. After the 6th Xhosa War in the 1830's, Governor Sir Benjamin d’Urban authorised construction of a fort at the site of the original blockhouse. The new buildings included a military hospital, guard houses, infantry barracks, and officers' quarters.

The area has experienced no less than nine wars, and has seen more than 2,000 British troops stationed at the fort. The first road leading from Fort Beaufort to the Katberg was built by Andrew Geedes Bain, and during its construction he discovered the fossilized skeleton of a prehistoric reptile near Blinkwater, which he named the Blinkwater monster. Today Fort Beaufort serves as a mini-dormitory for academic staff and students of Fort Hare University, based in the nearby town of Alice.