It was founded by Father Gerard Kennedy Tucker in the 1950s, because he was concerned about poverty in Asia following the Second World War. The first local group was established in Hawthorn, a suburb of Melbourne, in 1953, as the Food for Peace Campaign. Local groups were established in Perth and Sydney, and in 1962 the name was changed to Community Aid Abroad to reflect an emphasis on developing whole communities more broadly than just providing food for peace.
In 1965 Community Aid Abroad established Trade Action to provide trade opportunities between Australia and developing countries by selling handicrafts. From 1965 to 1976 Trade Action ran profitably and subsidised the organisation's operating costs, but its performance declined and it was sold in 1979. Local groups continued to trade with project partners, and in 1986 these efforts were combined to form CAA Trading, which by 2005 incorporated 17 shops Australia wide and mail order and wholesale operations in Adelaide.
Community Aid Abroad has always been a supporter of efforts in indigenous Australia to reduce poverty and support projects there. Also in the 1970s support expanded to the Pacific, in particular for anti-nuclear causes. In the mid-1980s Mexico and South America came under the umbrella.
In 1983 Community Aid Development Centres were started. This had more of a commercial focus, and is based on the principles of capacity building. It ran independently of the main Community Aid Abroad and is now called IDSS. In 1991 Community Aid Abroad merged with Australian Freedom From Hunger Campaign, becoming one of the largest Australian development organisations. In 1995 it took the name "Oxfam Community Aid Abroad" to reflect its affiliation with Oxfam International. In 2005 this was changed to Oxfam Australia.
The main community event of Community Aid Abroad was the Walk Against Want.