It was a coal mining town which developed into an important centre of the iron processing industry, taking advantage of the presence of local ore deposits and a plentiful supply of timber.
Robert Mushet, from a local mining family, developed here a process whereby molten pig iron could be converted directly into steel.
The Old Church in the Market Place consists of the tower and a monument. It was built and demolished in the 19th century, on the site of an earlier chapel.
Near the town centre is the GWR Museum, on the site of Coleford's former railway station.
Just outside the town are two popular tourist attractions, the Perrygrove Railway and Clearwell Caves.