The area was first settled in 1849 when Joseph Logue selected land on what became known as Logue Brook and he was followed in 1886 by John Bancells and W. J. Eastcott.
The real development of the area occurred in 1894 when Charles and Edwin Millar moved into the district to exploit the potential that the substantial stands of jarrah offered. Already they had successfully exported jarrah blocks to London to be used for street paving and they were starting to realise the huge potential of hardwood timber. They established their operations at Wagenup and proceeded to build their own timber town with accommodation and necessary support facilities. They constructed their own railway line which they joined at a place which became known as Yarloop.
A year later the Millars established a number of timber mills at Denmark (q.v) to the south which shipped out timber to all corners of the globe.
No one knows exactly how Yarloop got its name but it was either from the fact that the location was at a point of a Œyard loop¹ or because the Yalup Brook was nearby.
Not everyone who arrived to work in the mill wanted to live in the Millar¹s town. Land was cleared and the non-company town people established themselves on the western side of the railway. Thus Yarloop grew up as two towns on either side of the railway line - one a company town, one a public town.
In 1901 Millars made Yarloop the central workshop for their entire milling operations in South East Western Australia. At their peak Millars companies (they amalgamated in 1902 under the name Millars Karri and Jarrah Company) employed over 500 people in the Yarloop area.
Millars continued to grow throughout the early years of this century. By the 1930s they boasted the largest private railway in the world with eight railway systems and 25 locomotives.
Today Yarloop offers a rare opportunity to experience what a turn of the century timber mill town was actually like. So well preserved have been most of the buildings associated with Millars operations that in 1984 the National Trust classified the Yarloop mill town as a conservation area.