Established in 1911 with the construction of the Canadian Pacific Railway line through the area, the settlement was named after the historic town of Kirkcaldy in Fife, Scotland, reflecting the influence of Scottish immigrants and railway workers in the region. Despite its promising start as a railway siding, Kirkcaldy failed to prosper due to its close proximity—mere minutes away by road—to the larger nearby town of Vulcan, which drew away potential development and commerce as improved roads connected the area in the early 20th century.

The hamlet's economy initially centered on a general store that doubled as the post office, grain elevators, and a railway section depot, but these institutions dwindled over time. The post office, opened on January 15, 1915, under postmaster Wallace E. McKenzie, changed hands several times among local store owners and farmers before closing permanently on February 9, 1970. Today, Kirkcaldy is largely a ghost town, featuring only a handful of surviving buildings, with freight trains passing through without stopping, underscoring its transition from a brief era of rail-based activity to quiet rural obscurity.