Caterham has always been a place of two halves. Caterham on the Hill, the older settlement, sits on the chalk ridge of the North Downs. The church of St Lawrence, at the hilltop, has medieval origins and served the scattered farming community for centuries. Caterham Valley, the newer town, owes its existence almost entirely to the railway, which arrived in 1856 and transformed the narrow valley below into a Victorian commuter town within a generation.
Caterham School, originally the Congregational School, was founded in Lewisham in 1811 and moved to its current hilltop site in Caterham in 1884. The school's red brick Victorian buildings are a prominent local landmark, and the school has grown into a major co-educational independent with a strong academic reputation. Caterham Barracks, established in 1877, served as the Guards Depot for the Household Division for over a century. Generations of young men arrived at Caterham station and made the sharp climb to the barracks, where they were drilled into shape as Guardsmen. The barracks shaped the town's character and economy until closure in 1995. The site has since been redeveloped for housing.
During the Second World War, the chalk caves beneath the town were requisitioned as air raid shelters. The tunnel system, carved into the soft chalk, could hold thousands of people, and local residents would descend during bombing raids. The caves are now sealed but are occasionally opened for guided tours. The town's dual character persists: the hill retains its village feel with older buildings and longer views, while the valley has the shops, the station, and the busier streets. The North Downs Way passes along the ridge above, offering excellent chalk downland walking with wildflowers in summer.