The first European in the area was Major Thomas Mitchell who moved down the Darling from Bourke to what is now Menindee in 1835. Mitchell had a major confrontation with the local Aborigines near present-day Wilcannia during which time he killed at least two people.
The settlement of the area by Victorian pastoralists began in the 1850s and by 27 January 1859 a steamer, the Albury, had made its way up the river and reached the current site of Wilcannia which was known at the time as Mount Murchison Station. Mount Murchison had been named by Mitchell.
Wilcannia (the name reputedly meant 'a gap in the bank where the flood waters escape' in the language of the local Aborigines) was proclaimed in June 1866 and was incorporated as a municipality in 1881.
The township reached its height in the 1880s when it boasted 13 hotels, a population of 3000, and a local newspaper - the Wilcannia Times. In 1879 the Red Lion brewery (it is no longer standing) was built at the northern end of Reid Street. Its great claim to fame was that it was the first brewery which the famous beer baron Edmund Resch built in Australia.
At this time Wilcannia became the third-largest port on the Darling River. In 1887, for example, 222 steamers stopped there. Known as 'Queen City of the West' there was a time when most of the wool from northwestern NSW passed through the port. The town was also at the centre of a number of coach routes which traversed Western NSW. Some of the coaches were built here.
The discovery of gold at Mt Browne (see entries on Milparinka and Tibooburra) saw through-traffic and trade increase in the short term but the development of Silverton and Broken Hill saw the centre of trade shift. When the opal fields of White Cliffs were discovered in the 1890s trade increased again as Wilcannia became the central supply depot for the opal miners and the major recipient of their revenue. Eventually, as road and rail traffic killed the steamer trade the town's importance declined.
In 1892 Wilcannia was hit with a rabbit plague so severe that a man was supposedly employed to remove the rabbits from the streets which had been killed by children on their way to school. By the 1920s, with the arrival of reliable road transport, the town began to decline.