No one is exactly sure how the town got its name but there seems to be some consensus that it was probably named after a Mrs Pleasant who was a relative of one of the early settlers. These settlers moved into the area in the late 1830s with flocks of sheep and with bags of grain. One of the early settlers, James Phillis, had arrived in Adelaide in 1839 and literally rode a horse into the Adelaide Hills looking for suitable land to farm. He settled at Mount Pleasant in 1843, planted wheat, harvested the crop, and then had to take it to Adelaide to sell. From the profits he sailed to England where he bought a flock of romney marsh sheep which he shipped back to the area. Over the years he became one of the district's most prosperous and successful farmers.
Gold was found in the district in the 1860s but the deposits were small and the miners soon moved on. The town grew slowly never being anything more than a small service centre for the surrounding region. The Police Station, which dates from the 1860s, has been largely replaced by a building with 'ER' on it and the Old Talunga Hotel is quite charming. The main street, Melrose Street, is lined with beautiful plane trees.