European settlement of the area began when a government stock station was established in 1823. The town is based upon a land grant originally known as 'Grove Farm' which was made out to convict overseer Charles Booth in 1834. Noted explorer Thomas Mitchell twice stayed there during inland expeditions.
The area developed as a farming centre from 1840 to 1880 with orchards established in the 1860s. Local agriculture received a considerable boost from the arrival of the railway in the 1870s. A large flour mill was established in 1882. Consequently, in 1884 the town's name was changed from 'Spring Grove' to Millthorpe. Today it is still essentially a service centre to the rich farmlands which surround it.
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