Ladismith is overlooked by spectacular mountain peaks, of which two are notable namely Toringberg (2126 metres) and the twin peaks of Towerkop (2203 metres). Folklore has it that the twin peaks are the result of the rage of a witch who used her magic wand to split the mountain peak in two. The two peaks are placed in such a way in relation to each other that they appear different depending from where they are seen.
The first settlers appeared in this area in about 1750, looking for a future in agriculture without the political vice of taxation.
Ladismith was established on the 10th of February 1851 and named in honour of Lady Juana Smith, wife of the Governor sir Harry Smith. In 1879 the spelling Ladismith was adopted to differentiate it from Ladysmith in Natal. Seven hundred and forty-five hectares of the farm Elandsvallei was bought from Balthazer Kloppers for the sum of £1000. This area was devided into 138 erven by the land surveyor William Hopley with six streets named Kerkstraat, Koninginstraat, Albert Street, Suidstraat and Noordstraat.
Initially administered by the Dutch Reformed Church, the town received municipal status in 1903.
During the late 19th century and early 20th century Ladismith profited from the ostrich feather craze and became a boom town until the feather crash in 1914. This constituted a total crash in the economy of Ladismith, which up to today hasn’t been restored. The Towerkop milk processing factory was recently bought by an Italian multinational and its continuing future in the town is uncertain. A local cheese factory keeps total unemployment at bay and some efforts are being made to attract tourists and foreign currency.