Carterton is the second-largest town in West Oxfordshire and is 2 miles (3 km) south of the A40 road and 4 miles (6.4 km) south-west of Witney. The 2011 Census recorded the parish's population as 15,769.

Much of what is now the northern part of the town was held by the Moleyns family from at least 1369, but in 1429 William Lord Moleyns was killed at the siege of Orléans and the land passed to the Hungerford family. During the mediaeval period the main road through Carterton was one of the most important in the country, taking trains of packhorses laden with Cotswold wool over Radcot Bridge and on to Southampton for export to the weaving centre of Europe.

In the 1770s the land was acquired by the Duke of Marlborough.

The pattern of the present settlement dates from 1894 when part of the estate was sold to Homesteads Limited whose director was William Carter. The land was divided into plots of 6 acres and sold for £20 an acre with bungalows costing from £120. Many of the settlers were retired soldiers and people moving from the towns. Carterton soon made its name in the market gardening world. Black grapes from Frenchester Nurseries and the famous Carterton tomatoes were sold at Covent Garden Market.

Carterton, which by the late 20th century was one of the largest towns in Oxfordshire, was founded soon after 1900 as a colony of smallholders, on agricultural land in the northern part of Black Bourton parish. The founder was William Carter of Branksome (Dorset), a speculator who, through his company Homesteads Ltd of London, bought estates in several counties, in order to establish smallholdings and attract people back to the land. In Oxfordshire he acquired from W. C. Arkell, in 1900, the 740-a. Rock farm north of Black Bourton village, part of an estate sold by the duke of Marlborough in 1894. By late 1902 there were 16 houses, and the following year the new settlement, already called Carterton, was included in a local trades directory. carterton was founded by William Carter.