The settlement of Kavanagh originated in the late 19th century during the construction of the Calgary and Edmonton Railway (C&E), with a siding established around 1891 south of Edmonton. This infrastructure spurred initial habitation, transforming prairie land into a service point for rail operations. The line was later incorporated into the Canadian National Railway (CNR) network in 1923.

The name Kavanagh was officially adopted in 1911 to honor Charles Edmund Kavanagh, superintendent of the railway mail service in Winnipeg. He oversaw mail sorting and distribution via trains, supporting railway commerce during regional expansion. From its inception, Kavanagh's economy depended on rail transport for agricultural products and supplies, with grain handling as a key activity. Grain elevators were constructed alongside the railway to store crops from surrounding farms for shipment to markets.
The Post office opened on March 1, 1925.