Kelmė's name is likely derived from the Lithuanian word kelmynės, literally: the stubby place, because of the forests that were there at the time of its founding.[1][2] The Yiddish name is Kelm, as in Kelm Talmud Torah.
Prior to World War II, Kelmė (Yiddish: Kelm) was home to a famous Rabbinical College, the Kelm Talmud Torah. According to an 1897 census, 2,710 of Kelme's 3,914 inhabitants were members of the town's Jewish population, the vast majority of whom were merchants and traders and lived in the town. Most of the Jews in Kelmė rural district were murdered during a mass execution on 29 July 1941. On August 22 a second mass execution occurred. On 2 October 1941, some Kelmė and Vaiguva Jews were murdered in Žagarė. The executions were committed by the Germans soldiers, auxiliary police and Lithuanian collaborators.[3] In total, the number of victims is 1,250-1,300 people.