The establishment of the Jewish community dates back to the seventeenth century, when Kristupas Radvila officially allowed Jews to take up residence in the area of the Old Market. As the number of Jews increased, it became the most densely populated part of the city, and the spiritual-religiuos centre of the community started to form. In 1655, a wooden synagogue together with a hospice and a ritual bathhouse was mentioned as having been located on the northern outskirts of the Old Market's place gradually became part of the Jewish ghetto and in the middle of the seventeenth century, it began to be referred to as the Jewish Market. The buildings in the Jewish block were mostly wooden, so fires were a common phenomenon. Despite the damage of the fires, over 400 Jewish owned houses existed in Kėdainiai during 1867-1877.
Elijahu ben Šlomo Zalman (1720-1797) the future expert of the Talmud, also known as the Vilna Gaon (genius), spiritually matured in Kėdainiai.
At the end of the nineteenth century, 61% of Kėdainiai's residents were Jews engaged in different trades. In 1899, the Jewish craftsmen there consisted of 85 shoemakers, 45 tailors, 35 bread makers, 22 carpenters, 17 bricklayers, 8 blacksmiths and 35 headwear makers. In 1923, 7,342 people lived in Kėdainiai, of which 2,499 were Jews (34% of the total population).
In July 1941, the Jews of Kėdainiai, Šėta ir Žeimiai were forced to abandon their homes and were taken to a closed ghetto established by the Nazis. On 28 August 1941 in Daukšiai village, the Jewish communities of Kėdainiai, Šėta and Žeimiai were murdered - 2,076 Jews in total. Thus, a Jewish community that had existed in Kėdainiai for 300 years was destroyed.
A rabbi, the publicist of one of the establishers of the "Love of Zion" movement, Moshe Leib Lilienblum (1843-1910) was born in Kėdainiai and Iseris Mošė Rubinas (1871-1957), one of the pioneers of the Yiddish press in the USA, was born in Kėdainiai.