A timber milling industry was established in Wirrabara during the early 1850s. The town was surveyed in 1874. In 1877 the first government forest nursery in Australia was planted in the nearby Wirrabara forest. The town's name is a corruption of the Aboriginal name Wirrabirra which means gum forest and running water. The Wilmington railway line was extended north from Gladstone and Laura through Wirrabara and Booleroo Centre to Wilmington in the 1910s after the locals had been pleading with the government to build it for many years.