Carterton was originally known as Three Mile Bush and was founded in 1857 to provide a base for men working on the road between Greytown and Masterton.

When settlers sought to name their township they submitted to the Provincial Council an assortment of choices, namely Victoria, Alma, Unity, Hope, Clifton and Roxburgh. However, none of these names were taken up and it was not until 1859 that a further petition was presented to the Provincial Council seeking to re-name Three Mile Bush, ‘Cartervale’ and the village in the Three Mile Bush ‘Carterville’. On 26th of July 1859, the Provincial Council in Wellington declared that "the Three Mile Bush and adjacent lands on the east side of the main road, consist hence forth as a township to be known as Carterton".

Settlers had chosen the name in recognition of Charles Rooking Carter who was a strong advocate for Wairarapa settlers and was a member of the small Farm Association on the Provincial Council and General Assembly.

During his association was Carterton, Carter built the Black Bridge over the Waiohine River, was instrumental in opening the first public school and was a major benefactor of the Carterton Public Library. He bequeathed 2500 pounds for the establishment of a home, where free board and lodgings were available for the poor elderly men of the district who had come to the end of their working lives and would otherwise be forced to take to the road as ‘swaggers’. Carter donated the land on which Carter’s Reserve is situated and donated 2240 pounds to start a fund for the erection of an astronomical observatory.

Carter died on July 22, 1896 in Wellington. His body was brought back to Carterton and he is buried at the Clareville Cemetery.