The park opened in 1983, and was operating seasonally until late 2012. The park was based on the story of 'Camelot, King Arthur and the Knights of the Round Table'. The local area was once covered by the largest lake in England Martin Mere, which was first drained in 1692 by Thomas Fleetwood of Bank Hall in Brethton. (The story is that Sir Lancelot's parents King Ban of Benwick and his queen Elaine escaped to Lancashire from their enemies in France. Elaine went to help King Ban who had fallen and put Lancelot down on the shore of the lake, by where he was abducted by nymph Vivian who vanished into the waters of the lake with him. Vivian brought up Lancelot and when he went to King Arthur's court he was knighted as 'Sir Lancelot of the Lake'.) Martin Mere has been locally known as the 'Lost Lake of Sir Lancelot' following the myth.
In 1986, it was taken over by The Granada Group, and operated by them alongside its now defunct sister parks American Adventure and Granada Studios Tour In June 1998, the park was subject to a management buyout, in which the park went to Prime Resorts Ltd. Camelot had seen a downturn in attendance in later years, in 1995, Camelot's attendance was 500,000 visitors throughout the season.
In 2005, Camelot's attendance was only 336,204 visitors. In August 2006, in an survey of healthy food available, at leading tourist attractions in the United Kingdom, Camelot came joint bottom scoring only one point.
In February 2009, Prime Resorts announced that the park was in receivership, and would not reopen for the 2009 season. The hotel was bought by Lavender Hotels in March 2009, and in April 2009, it was announced that a buyer had been found for the park and that it would reopen in May 2009.
The theme park was purchased by Story Group, a construction company based in Carlisle and leased to Knight's Leisure who ran the park. The site's future remains uncertain as the new owner is planning to redevelop the site. Current indications are that this will be a housing development.
The closure of the park was announced by its operator, Knights Leisure, in November 2012, the managing director blaming poor summer weather and events such as London 2012 and the Queen's Jubilee for declining visitor numbers. Today, some rollercoasters were sold (for example Whirlwind bought by the German "Skyline Park"), others rust in the abandoned park.
In August 2014, an application to build 420 houses on the site by owners Story Group was unanimously rejected by Chorley Council, as the development was not permissible within the Green Belt. As of 2015, the park is still standing, albeit crumbling and having been attacked several times by arsonists. Rides that still stand on the site include the Knightmare rollercoaster.
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