The town most probably owes its origin to the foundation of an abbey in the sixth century, from about 520 A.D., when St. Ailbe, Bishop of Ferns, founded an Abbey in Clane, and made St. Senchel the Elder its first Abbot. St. Ultan Tua, who used to put a stone into his mouth to prevent him from speaking during Lent, and his brother Fotharnaise, are said to have been buried in Clane. They were brothers of Maighend, Abbot of Kilmainham, from whom the parish and church of Mainham, near Clane, were probably called.

The ruins of the Franciscan monastery founded at Clane by Sir Gerald FitzMaurice, 3rd Lord Ophaly, in 1272 still exist. In 1542 Henry VIII’s Commissioner granted the site and precincts of this House of Friars, manor or preaching-house of the preaching Friars of Clane to Robert Eustace, Roger Roche and Ed. Brown for £177. Besides about 70 acres (28 ha) of land in the neighbourhood – its possessions consisted of a church, cemetery, chapter-house, dormitory, store, kitchen, two chambers, stable and orchard. The dormitory and other buildings probably stood on the north side of the Abbey Church, and have long since completely disappeared.

The parish of Clane has the distinction of being the place where the rebellion of 1798 broke out; for it was at Prosperous that the temporary barracks occupied by some of the North Cork Militia, and a Welsh cavalry regiment called the Ancient Britons, were attacked and burnt; and Captain Swayne and most of the soldiers were slain.