First mentioned in an Anglo-saxon will of about 900 AD, Kersey was already a thriving community at the time of the Norman Conquest in 1066. The Domesday Book of 1086 described the village's inhabitants and their farming activities, as well as mentioning a church "with three acres". It is calculated that the population then would have been about 150.
Kersey is next mentioned about 100 years later in the tax records of Abbot Sampson of Bury St Edmunds. About this time, a local heiress, Nesta de Cockfield, gave land on the northern side of the valley for the foundation of an Augustinian Priory, followed by the gift of the patronage, or advowson, of the parish church. This meant that the Prior became responsible for providing priests for the parish church.
From the 12th century onwards, Kersey grew significantly and enjoyed considerable prosperity. The Lord of the Manor of Kersey was granted the right to hold a weekly market in 1252 and early in the 14th century, the church, already rebuilt since the 11th century, was enlarged further.
Tradition has it that Kersey was a 'wool town' and that its wealth was based on wool exports. However, there is no evidence for this and modern historians question this assumption, although sheep rearing figured prominently in the pattern of farming recorded in the Domesday Book. What is indisputable though is that clothmaking was well established by the beginning of the 14th century in nearby towns, such as Hadleigh, Lavenham and Sudbury, with indications that Kersey might also have been involved. It is thought that any wool used for weaving was imported and that the ready supply of 'free men' to act as weavers led to Kersey being an ideal location for the weaving industry. Also the association of its name with a type of course, ribbed cloth made up in short, narrow lengths is not supported by historical evidence. The development of the village was checked by the Black Death in 1349; a large proportion of the population died and work on the enlargement of the church was suspended. The village recovered during the 15th century.
By the end of the 15th century, cloth making in Kersey and neighbouring towns and villages was enjoying a boom which lasted through the 16th century, but when the centre of the woollen industry moved north to Yorkshire in the 17th century, Kersey became almost entirely dependent on agriculture and its population and prosperity declined.