Prior to European settlement the area was inhabited by the Naralte Aborigines who were described by one early settler as 'very friendly and quickly picked up a smattering of English. They were willing to work ... and attempted to instruct the newcomers in their methods of hunting.' The river provided abundant food and they lived well off a diet of kangaroos, emus, wombats, goannas, lizards, ducks, turtles, fish, snakes and bird eggs.
The first European into the area was Captain Charles Sturt who, being assigned to solve the great mystery of why so many rivers flowed westward from the Great Dividing Range (often known as the question of whether Australia had an 'inland sea') rowed a whale boat down the Murrumbidgee in late 1829 and reached the junction with the Murray River on 14 January 1830. He continued down Australia's largest river passing Mannum in early February (there is a plaque beside the river recording the event) and reaching Lake Alexandrina, at the mouth of the river, on 9 February, 1830.
From this point onwards there was always the thought that the Murray River could be used for transportation and access to the western areas of New South Wales and Queensland. However it wasn't until the formal establishment of Goolwa as the port at the mouth of the Murray that this became a reality.
There was a debate as to whether Victor Harbour or Port Elliot would be the ocean port. It was eventually decided that Port Elliot was the best location but this was probably based on its proximity to Goolwa and the belief that a canal could be constructed between the two locations. In 1851 it was agreed to build a railway between Port Elliot and Goolwa at a cost of £20,000. It ended up costing £31,000 and wasn't completed until 1854.
By 1853 paddle steamers were operating on the Murray. The first two steamers were the 'Mary Ann' captained by William Randell and the 'Lady Augusta' captained by Francis Cadell.
By 1840 the land along the Murray River around Mannum had been surveyed and, although the river was not being commercially used at the time, some people started to lease and purchase the land. The most prominent was the explorer Edward John Eyre who took up land near the town in 1841.
The founding father of Mannum was William Richard Randell who, famously, had built the first flour mill at Gumeracha. Believing that there was money to be made by paddlesteamers on the Murray he built a boat at Gumeracha and transported it by bullock dray to a landing which is about 3 km north of present-day Mannum. The steamer was named 'Mary Ann' after Randell's mother, was 55 feet long, and it was given a trial run on the Murray on 19 February 1853. Shortly afterwards Randell made a successful trip as far as Echuca and Moama and subsequently he travelled up the Murray River as far as Menindie.
By the 1860s up to 20,000 bales of wool were being brought down the river each season. The steamers were used to move huge barges which were laden with wool. Some went to Goolwa and on to Port Elliot. Others were unloaded at Mannum and overlanded to Adelaide by bullock teams. The town was surveyed in 1868.
In the 1870s David and John Shearer established a blacksmith business in the town. They were remarkably creative building Australia's first car (a funny piece of equipment which was driven by a steam engine fired by mallee timber) and the company evolved into Horwood Bagshaw, a successful engineering company.
By the 1870s and 1880s many Germans had moved into the area. Agriculture along the riverbanks was becoming the mainstay of the town's economy.