The Ngooraialum tribe were the Most Aboriginal inhabitants of the Region. The first explorer to enter the Goulburn Valley has been Thomas Mitchell who spanned the Goulburn River in Mitchelstown.
Squatters began settling the region in 1840 with a college being established that also a police station in 1841. The aboriginal protectorate was moved from Mitchellstown into Murchison in 1840 and shut in 1850.
In addition, he set up a resort and punt support within the Goulburn for gold miners traveling between Bendigo and Beechworth. A township was created in 1854 with the city being named after Captain John Murchison, an early settler.
The town grew quickly, with a post office opening on 19 January 1855 (replacing a previous office in Warranga) a flour mill in 1858 along with a Presbyterian church and faculty in 1859. Little selectors began settling the region after 1870. A bridge was constructed within the Goulburn to substitute the punt support in 1871, using a paper, courthouse and mechanics’ institute being set in 1870.
The Aboriginal Ngooraialum tribe (about 200 strong) occupied the land around Murchison before being devastated and dispossessed by the arrival of Europeans.
The first white men in the district belonged to the party of explorer Thomas Mitchell which crossed the Goulburn River to the south at what became Mitchellstown
. The first Europeans to pass through the future townsite were probably the drovers Joseph Hawdon and Charles Bonney who were over landing sheep and cattle from Mitchellstown to Adelaide along the river system in 1838.
An Aboriginal Protectorate was transferred from Mitchellstown Victoria to Murchison in 1840 with a school established that year and a native police force in 1841. Squatters also began taking up local land in 1840.
In 1850 the Protectorate closed and French vigneron Ludovic Marie settled at Murchison, establishing vineyards. The site became a river crossing used by gold miners traveling between the Bendigo and Beechworth fields in the early 1850s. Marie, therefore, established a hotel and a punt service over the Goulburn River (in 1860 he helped start Chateau Tahbilk which is still in operation and surveyed Nagambie).
A township, the first in the Lower Goulburn Valley, began to develop around the crossing which was surveyed and named in 1854 after a Captain John Murchison
. A period of fairly rapid growth ensued.
The first post office was built in 1855, a flour mill in 1858 and a Presbyterian Church and school in 1859. Land along the Goulburn was first opened for selection in 1865 with small landowners moving into the area in the 1870s.
A bridge replaced the punt service in 1871 and the first newspaper was established in 1873. A courthouse and a mechanics institute were built in 1874.
The town benefited greatly from the river trade which began with the arrival of the first paddle steamer in 1875. At that time it had six hotels, a number of general stores, two flour mills, a post office, a sawmill, cordial factory, two blacksmiths and numerous other stores and services.
In 1878 the Murchison police station temporarily became the base for operations against the Kelly bushranging gang.
The railway reached Murchison East in 1880. The building of the Goulburn Weir from 1887-90 dropped the water level and so finished off the dying river trade. It also enabled irrigation projects to proceed in the area, thereby enabling the agricultural development of Shepparton, Tatura, and Dhurringile as Murchison declined. Murchison East grew as a wheat depot on the branch line.
Between 1941 and 1947 some 4000 POWs were interned at Murchison. These were overwhelmingly German, Italian and Japanese POWS although the German officers were held at the Dhurringile mansion to the north of town. By 1942 the POW camp was employing 675 people, including 64 officers, to guard the prisoners