Kilmihil is derived from CILL MHICHIL, Michael's Church, the Michael in question being St. Michael the Archangel. Tradition in the parish credits St. Senan as the founder of the first church here during the early years of the sixth century.

The Church ruin in the cemetery was originally the medieval parish church. In 1632 Mariana MacGorman dreamed on three occasions that St. Michael the Archangel appeared to her and directed her to go to his church at Kilmihil and dig for his well at a little distance, where she should find some reeds growing. She did so with the help of her parish priest and son and discovered a spring on the spot indicated.

St. Michael's shrine is still a revered spot today. The well discovered by Mariana MacGorman cured her gout and other ailments. News of its healing effects spread abroad and it became a popular place of pilgrimage. During the penal days it was visited by people from far and near seeking cures for their various complaints. The church ruins were partially rebuilt and the site of the shrine and well were cleaned and renovated between 1934 and 1937. The cemetery contains some fine examples of the house-like tombs peculiar to the area.

Kilmihil has changed considerably since Samuel Lewis described it in 1837 as a small hamlet containing 79 people. The village now has a population of over 300. The parish of Kilmihil became a separate Roman Catholic division, separating from the parish of Kilmacduane, in 1848. About 120 children were educated in two private schools in 1837. One hundred and fifty years later over 200 pupils are educated in four National Schools.

In April 1920, after Sunday mass, an attack took place on the R.I.C. patrol in the village of Kilmihil. A local man, John Breen, was shot dead. Sergeant Carrol, R.I.C. was also killed and Constable Collins was severely wounded. Several civilians were injured in a conflict between police and people. There are reports of panic as men, women and children fled in all directions.

John Breen was aged 22. He became a member of the Volunteers in 1917, with the formation of the Kilmihil Company. He became one of its first officers. A monument to his memory has been erected in Kilmihil.