The first Europeans in the area were Blaxland, Wentworth and Lawson in 1813 who probably spent a night camped near where the Leura Railway Station now stands.
The town experienced some development after the construction of the road across the mountains but it was slow and settlement was sparse. Between 1885-87 there was some coal mining at the Gladstone colliery which was located near the present site of the Leura golf course. The coal was sent to Sydney from a railway siding which was located near the mine.
The Leura village railway station was constructed in 1891. At the time the area was known as Lurline but the station was officially named Leura which some claim was a local Aboriginal word meaning 'lava'. This seems very doubtful.
By the 1920s the area was a popular holiday destination for Sydneysiders eager to escape the heat and humidity of the city. By the 1970s it had become popular with Sydney's artistic community as a weekend escape destination.