The name means below the waterfall, due to its position below a 228m waterfall. The village did not develop into a town like its sister town of Waterval Boven, which is above the waterfall. Both settlements were established in 1895 because of the building of the Pretoria - Delagoa Bayrailway line.
President Paul Kruger lived in Waterval Onder before he left South Africa via Mozambique during the Anglo-Boer war. His Krugerhof house was proclaimed a national monument.