Named after Leyburn in England, the town grew up as one of a number of gold diggings in the Warwick area. In the 1860s there were both alluvial and quartz diggings in the area which led to the establishment of a number of camps along Thanes Creek and Darkey Flat. Leyburn grew up as a town servicing the surrounding gold mining camps and by the late 1860s it boasted a number of hotels and general stores and a police station.
The town grew in importance as teamsters and itinerant farm workers used it as a stopover point on the road between Goondiwindi, Toowoomba and the port at Ipswich.
It is possible that Leyburn could have continued as an important centre but the combination of the discovery of gold at Gympie (which saw many of the miners leave for the more lucrative field), the difficulty of extracting gold from the mines in the area which kept flooding, and the decision to have the railway by–pass the town all ensured its slow decline.
Today it is nothing more than a general store, the Royal Hotel (which dates from the 1860s when the town was booming), the usual public services - police, school and post office, and a service station. The town's major industry is the local sawmill.
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