First settled in the 13th century, it received its city charter in 1377. Until the 19th century it belonged to the Zamoyski family. The town is centered on a hill, and expanded onto the flat land to the north and east. A busy highway still runs through the center of town, cutting diagonally through the town square itself.
As with much of the Lublin area, Kraśnik was a major center of Judaism, with 5,000 Jews (40% of the population) prior to World War II. Historical accounts place Jews in the area in 1531, but the official right to settle there was granted to Jews in 1584. In 1654, Jewish residence was officially limited to the area near the synagogue, but in practice this was not rigidly enforced. During the war, Kraśnik was the site of the Budzyn labor camp, where the prisoners worked for the Hermann Göring Werke on aircraft production. This camp, with around 3,000 Jews, became a subcamp of Majdanek; 300 workers who remained until July of 1944 survived. Virtually all left the area, and there are few if any Jews currently resident in the town.
Kraśnik is the site of the second SOS Children's Village in Poland, established in 1991.