The European history of the Tweed Shire began in 1823 when the Tweed River was discovered by John Oxley. After sheltering on Cook Island, (4 km from the River's mouth), Oxely travelled 11 kilometres (6.8 mi) up river. In 1828, Captain H. J. Rous explored 50 kilometres (31 mi) up the river. Settlers began to arrive in 1828, the first of which were the cedar getters, who came to harvest Great Red Cedars and send them back to England. During the height of the cedar logging industry, the Tweed Valley was one of the wealthiest districts in Australia.
The Municipality of Murwillumbah was created on 25 May 1902, and held its first meeting on 22 August 1902, at which Peter Street was elected its first Mayor. The Shire of Tweed, with its primary centre of population at Tumbulgum on the Tweed River, came into being in the surrounding area on 7 March 1906 with the enactment of the Local Government Act 1906 (NSW). On 1 January 1947, the two amalgamated to form Tweed Shire.
The most popular religious affiliations in descending order in the 2006 census were Anglican, Catholic, no religion, Uniting and Presbyterian. A small but significant Sikh community is based in Murwillumbah.
In May 2005, the Governor of New South Wales dismissed the Tweed Shire Council following a public inquiry that found the Council was improperly influenced by developers involved in a property boom in the area. The inquiry was commissioned by the Minister for Local Government, Tony Kelly, following community concern about the way planning decisions were made. The Minister appointed the Director-general of the Department of Local Government, Garry Payne, former Sydney Lord Mayor Lucy Turnbull and former Tweed Shire councillor, Max Boyd as Administrators for the ensuing three years.
Tweed Shire Council is composed of seven Councillors elected proportionally as one entire ward. The Councillors are elected for a fixed four-year term of office. The Mayor is elected by the Councillors at the first meeting of the Council. The most recent election was held on 8 September 2012, and the makeup of the Council is as follows: