Prior to European settlement the area was occupied by the Woiworung Aborigines. When gold was discovered in 1863, a rush ensued and a new town was laid out 2 km from the initial settlement and named after police magistrate Charles Warburton Carr. It also functioned as a service centre to goldfields further east.
With the arrival of the railway in 1901 the town became a railway terminus and the salubrious mountain air and scenic attractions began to draw Melburnians, resulting in the provision of guesthouses.
Seventh Day Adventists moved here from Melbourne in 1904. They set up a printing works in 1906, a sanatorium and hospital in 1910 and a health food factory in 1923.
Floods struck the town in 1934 causing a degree of permanent relocation .
The Seventh Day Adventists and their industries are still a strong presence in the town. A timber-milling industry has also emerged on the back of the local forests.
Swimming, fishing, bushwalking, horseriding and birdwatching are popular local pastimes and tobogganing is enjoyed on Mt Donna Buang in winter.
The Warburton River Market is held on the third Sunday of each month on the banks of the Yarra River.
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