Bishops Cleeve was called Wendlesclife in Saxon times, but later contracted to Clife. The land around the village was called Timbingctun. A small Benedictine priory was built in the village around the year 730 and Offa, the King of Mercia, donated 15 hides of land to the priory in 770, enabling the monks to live off the rent from that land and concentrate on their religious duties. Monks became rich on this income, which prompted the Danes to invade in 888 and relieve them of it! The priory was never rebuilt, so the land passed to the Bishop of Worcester (the Diocese of Gloucester did not exist until 1542), who therefore gained possession of the Manor of Clife and it was renamed Bishop's Cleeve. The Bishop built a fine summer palace at Bishop’s Cleeve in 1215 so that he could oversee his Manor. This palace still exists, and was used as the Rectory after the Reformation. It became Oldacre's offices in 1974, though it has since been purchased by Bovis, the house builders (for use as their offices) and is now called Cleeve Hall. The tithe barn opposite Cleeve Hall was where the Rector stored the tithes that were due to the church from the local people. The house that stands next to the church is called "The Priory", and the existing Priory Lane of course went down to the original priory. Priory stores used to be in Station Road, but that has now been converted into a house. Station Road led to the station of the GWR on the Cheltenham to Stratford line,. No sign of the station remains, as the houses in Pine Bank have been built on the land.

The Saxon church dated from 730, but it was attacked by the Danes and was replaced by the present Norman church, which dates from 1170. The chancel of the church was enlarged in 1280 to accommodate all the local clergy, so it was in fact a Minster, but it was never given that title. There is a room over the porch that was originally used by the watchman, but later it was used by the Chantry priests, and then as the village school. Eventually a purpose-built school was provided, but that has now been converted to the Church hall.

The village was greatly enlarged to accommodate the families of workers of Smiths Aerospace factory, which was built near Bishop's Cleeve just before the Second World War. The village has nearly doubled in size recently as a housing estate has been built on what was once a local farm.