The first European to map Mount Barker (and consequently to name it) was Captain Charles Sturt who saw it from Lake Alexandrina on 18 April 1831 and named it after Captain Collet Barker of the 39th Regiment who had recently been killed by Aborigines somewhere near the mouth of the Murray River.
The area was surveyed in 1839 by the pastoralist Duncan McFarlane with the expectation that it would be opened up to wheat and grain farming. Lots of 80 acres were to be sold but there was a problem as few farmers were willing to produce wheat unless their was a flour mill nearby. When John Dunn arrived in the area he was offered free land to establish a flour mill and by 1844, when the mill was completed, Dunn had established the first steam flour mill outside of Adelaide. The mill operated successfully for the next 50 years and it was on the basis of its operations that the town developed.
The town's major buildings were completed over the next three decades with the Post Office being built in 1860 and the Police Station with its stables being completed in 1878. The area's future was ensured with the arrival of the railway in 1883.