In the early 1870s, the Calgary-Edmonton Trail crossed the river at a point known as Red Deer Crossing. With the coming of the railway, traffic increased and a trading post and stopping place were established. When the Northwest Rebellion broke out in 1885, a small regiment was stationed at Fort Normandeau. A reconstruction of this fort stands near Red Deer.
The river was originally called Was-ka-soo See-pi, the Cree word for elk, because of the abundance of these animals. Early Scottish fur traders thought the elk were related to the red deer of their native land, hence the present name for the river and city.