Souchez is a village 3.5 kilometres north of Arras on the main road to Bethune in the Pas de Calais Department. The cemetery is about 1.5 kilometres south of the village on the west side of the D937 Arras-Bethune Road.

On 26 September 1915, Souchez was taken from the Germans by French troops, who handed the sector over to Commonwealth forces the following March. The village was completely destroyed. The "Cabaret Rouge" was a house on the main road about 1 kilometre south of the village, at a place called Le Corroy, near the cemetery. On the east side, opposite the cemetery, were dugouts used as battalion headquarters in 1916. The communication trenches ended here, including a very long one named from the Cabaret.

The cemetery was begun by Commonwealth troops in March 1916, used until August 1917 (largely by the 47th (London) Division and the Canadian Corps) and at intervals until September 1918; these original burials are in Plots I to V inclusive. It was greatly enlarged after the Armistice when more than 7000 graves were brought in from the battlefields of Arras and from 103 other burial grounds in the Nord and the Pas-de-Calais.

The cemetery now contains 7655 Commonwealth burials of the First World War, more than half of them unidentified. There is also one Second World War burial.

On 25 May 2000, the remains of an unidentified Canadian soldier were entrusted to Canada at a ceremony held at the Vimy Memorial, France. The remains had been exhumed by staff of the Commonwealth War Graves Commission from Cabaret-Rouge British Cemetery, Souchez, Plot 8, Row E, Grave 7. The remains were laid to rest within the Tomb of the Unknown Soldier, in a sarcophagus placed at the foot of the National War Memorial, Confederation Square, Ottawa, Canada.