The history of the town of Clyde is intrinsically linked with the history of the discovery and mining of gold in Central Otago. The first post office building dates to the beginning of the town in 1863. Although it was officially named Clyde in 1864, the town was first known as Dunstan in the 1850s and as Hartley's township after his discovery of gold in 1862.

Gold mining began in Central Otago with Gabriel Read's discovery of gold in Gabriel's Gully, near present-day Lawrence, in 1861. The following year Hartley and Reilly left this gully and travelled further into Central Otago. They spent the winter prospecting in the now-flooded Clutha Gorge between present day Clyde and Cromwell, finding enough gold in the area to travel back to Dunedin and lodge 87 pounds with the Gold Receiver.

The 1862 discovery precipitated a rush to the area, with the first passenger-carrying coach travelling from Dunedin to Clyde in November of that year. Six weeks earlier, the first gold escort had left Clyde for Dunedin with packhorses. Subsequent gold escorts consisted of a solid covered wagon with armed guards. A ragged canvas town quickly sprang up, and by December of that year between six and seven thousand miners and settlers occupied Clyde and the surrounding areas. Sunday afternoons would see up to 4000 men congregate in the town. At Christmas 1862, 320 people sat down to dinner at one of the "innumerable" hotels, the cost of the meal being 10s 6d. While Clyde was itself the centre of mining activity in 1862, as gold was quickly discovered in other parts of Central Otago such as Arrowtown and Queenstown it was also the source of supplies for those travelling on to other areas.

A photograph dated c. 1862 shows a profile of canvas and wooden buildings along the terrace above the river where the town now stands, and a small collection of wooden structures on the lower beach . McCraw gives a date of 1865 for the same photograph, a more likely date given the number of structures and roads visible, and has annotated it with details of the infrastructure used to mine a seam of coal along the riverbank. By the late 1860s photographs show a row of single-storied wooden buildings running cheek-by-jowl along the main street, now known as Sunderland St . The buildings all feature flat-fronted facades with business signs, among them one named the Dunstan Hotel, and the Hartley Arms Hotel can be seen several doors along. These were just two of many hotels in the town.

Civic administrators, such as Commissioner Vincent Pyke, police representative Jackson Keddell, and Henry Stratford, gold receiver, who came to Clyde in 1862 after the announcement of the discovery of gold, were all ardent Anglicans in a predominantly Anglican community. They were all concerned to establish a building for worship, and first held prayer meetings in the courthouse. Pyke began fundraising for a church, giving lectures in the surrounding settlements at which he solicited for donations. Within a year the Episcopal Church Committee had purchased a large corrugated iron building, used as a store at Manuherikia. This was dismantled and re-erected on the site at Clyde in 1863, one of the earlier churches to be erected on the goldfields.

During the week after the opening of the church a public tea meeting was held to raise funds, the large number of ladies attending caused surprise as it was considered that there were few women on the goldfields. Annan reports that the crowd was so large that "the sumptuous feast had to be served in relays, as the building was quite inadequate. There were speeches, then music, then a humorous speech in prose and verse from Mr. Stratford, who also informed the people that the church would be free of debt in a few days." There was no ordained clergyman to hold services in this building, and no funds to pay one. Bishop Harper, Bishop of Christchurch, applied to England for an ordained clergyman for the goldfields, whose time was to be spent between Clyde and Queenstown. Prior to this the Bishop himself visited in 1864 and 1866 on his travels over his large, scattered diocese and at other times lay readers such as Stratford held services. Bishop George Selwyn also visited Clyde in February 1866. Clergy from Dunedin and Milton travelled to Clyde to hold services, and from September 1868 Vincent Pyke officiated regularly on Sundays.

In 1865 at a meeting of the committee of the Church of England a decision was made to replace this corrugated iron building with a wooden structure, known as a Union Church, to be used by all denominations allied to the Church of England but built by the Church of England. By 1866 the name was changed from the Union Church to the Church of England and other denominations had to negotiate for its use. The first vicar, Rev. Joshua Jones, who had arrived in 1871, left in 1875 and was replaced by Rev. John Dewe in January 1876. At the first vestry meeting held under Dewe's management, a decision was made to build a new church and a building committee was formed. The first load of stones arrived on the grounds in January 1877 at a cost of 3/-. Bishop Selwyn laid the foundation stone, and the building itself was completed within eight months and consecrated by the Dunedin Anglican Bishop Neville.

In 1962 a hall with a kitchen was added to the church complex and the porch of the 1865 church building was moved behind the hall to function as a shed. At the same time, the Clyde vicarage in Pyke St. was sold and a new vicarage built in Alexandra beside the Anglican St. Aidan's church.

In 1977, St Michael and All Angels celebrated its centennial. A new east window was erected in September 1991, and dedicated in December of that year, opening up the sanctuary to light. The archway was repaired in 1984. Many smaller repairs have been completed on the church buildings.

The Church remains the centre of Anglican worship in Clyde, and a focus on for the community.