Karthmere's construction was issued by King Ulgrind the Blind, who had the city built in honor of his deceased son, Rathtahkrind Long-Winter. Ulgrind, despite being born blind, personally oversaw the construction of the city, and he ordered it to be as big and as glorious as possible.
The Karth-clan ruled over the city for years, until Asterion the Black and his 500 companions came to conquer the Borderlands for King Durran Godsgrief. Versions of how Asterion approached the Karths are debated, some claim he immediately decided to raid them, others say that he tried a more diplomatic approach first. In the end, Asterion ordered the destruction of Clan Karth and Karthmere. Asterion had the many images of House Karth destroyed and the city sustained heavy damages. The main castle itself took the most hits.
After Asterion's victory, he granted the lordship of Karthmere to House Blacktower, for their help in defeating King Ulgrind. However, the Blacktowers eventually died out, and after them many other Houses followed who would bear the title Lord of Karthmere. After House Blacktower came House Valennis, then House Ormel, House Glovelyn, House Farrest, House Karling, House Marston, House Whitegard, and House Taller, who are the current lords of Karthmere.
The city is famous for its underground catacombs that house the dead of House Karth. Thanks to this the city was dubbed the "City of the Dead". Karthmere has a reputation of being cursed, since most of its inhabitants did not survive long, and all noble Houses that came to rule it eventually went extinct. Karthmere's history of its rulers' bloodlines dying out is eerily similar to that of Harrenhal, who also has a sinister reputation for the exact same reason.