In prehistoric times, the valley of the River Usk was densely wooded, providing ample resources for the Neolithic hunter-gatherers who roamed there. With the development of agriculture, much of the forest was cleared to make way for small farms and grazing of livestock. The Celtic people who lived here were known as the Silures. During the Iron Age, numerous hillforts were built around the confluence of the Afon Lwyd and the River Usk. The largest of these, looking down on what was to become Caerleon, is today known as the Lodge Wood Hillfort. It dates from about 300 BC, and is claimed to have been the home of Beli, one of the mythical kings of Britain. Many of the surrounding hills supported smaller enclosures, which were most probably small farmsteads held by single families. The area below Lodge Wood was originally grasslands with small patches of woods, and was apparently used for grazing until the latter part of the Iron Age.

The Roman invasion of Britain took nearly 25 years to reach this part of the country. Conquest of this area cost them much time and blood. Around 75 AD, when they had finally "pacified" the Cymry (Welsh), they built a legionary fortress at Caerleon. The fort was built on a low ridge, well above the flood plain, which stretched from Lodge Wood to the river. It was protected on the west and south by a bend in the river Usk, and on the east by the Afon Lwyd. It was close enough to the tidal estuary of the Severn to allow supplies to be brought in by ship, rather than overland. There are numerous smaller fortresses scattered about the area, suggesting the Pax Romana came at a rather high price. Many historians believe the Silures were never defeated, but were persuaded to cooperate with the Romans by allowing them a certain amount of self-rule.

Isca, as the fort was called by the Romans, was the home of the Second Augustan Legion. At it's peak, some 5500 soldiers were quartered there. Within the Roman walls were barracks, magnificent baths, workshops, storages and drill fields. Shops, run by the military or civilians, lined the main streets of the complex. Outside the walls, a significant town grew up. Several fine temples, more baths, shops and large Roman villas have been discovered. They also built an amphitheatre which would seat an estimated 6,500 people.

Near the end of the third century, the Legion left Caerleon. They demolished some of the buildings, but left others standing. The Silures took over the place, using the baths as cattle pens and building smaller stone houses between and around the ruins from the rubble that was left. Contrary to the glorious descriptions from Geoffry of Monmouth and the Mabinogion, the archaeological evidence suggests there was little growth or improvement in the village. From the leaving of the Romans until the building of Caerleon Castle by Caradoc ap Gryffyd (1055 - ?), the place seems to have been essentially a squatter's town. The castle remained in Welsh hands until the thirteenth century, when it and the town were taken by the Normans. The original wooden structure was apparently burned and replaced with a proper Norman castle of good solid stone (primarily from the Roman baths, which were demolished at that time).

Throughout the middle ages, Caerleon survived as a small port and market town, trading with places as far away as Portugal. In the eighteenth century, the town was still small, occupying less than half of the old Roman Fort. The place was totally bypassed by the industrial revolution, with the local manufacturing center being the neighboring Newport. Today, Caerleon is a quiet suburb of Newport, surrounded by the ghosts and glories of the past.