Ceredo was so named by its founder because of the bountiful harvest of corn upon the site. The name is derived from Ceres, the goddess of corn and harvest.
New England Congregationalists founded Ceredo to demonstrate the superiority of an economic system not based on slave labor. Eli Thayer, an abolitionist congressman from Massachusetts, believed that bringing abolitionists like himself into southern states could ultimately bring about the end of slavery. While some welcomed the newcomers, several area newspapers published opinions against this "invasion." The newspaper of nearby Ashland, Kentucky, however, supported this move. By 1857, the city was fully established with a newspaper of its own and several industries.
With John Brown's raid at Harpers Ferry in 1859 and the outbreak of the Civil War in 1861, the situation for this abolitionist colony appeared bleak. Its purpose to bring about the peaceful end of slavery over, several residents volunteered for pro-Union regiments.