In 1829 soldier Ensign Robert Dale became the first European in the area when he followed the Helena River inland to the vicinity of the current-day Mundaring Weir.

Europeans began to take up land in the area in the 1840s but the first freehold title was not granted until 1882. Population growth in the Mundaring area was slow. Timber cutters were, however, attracted to the region to fell jarrah and karri trees and a sawmill was established in 1889. Mundaring became an important township when it was selected as the site of the railway spur line to supply the construction of the Mundaring Weir and pipeline to supply water to the goldfields.

The construction of the pipeline was the 1895 idea of Western Australia's Engineer-in-Chief, Charles Yelverton O'Connor. At the time the goldfields at Kalgoorlie were suffering from an unreliable water supply but O'Connor's inventive scheme attracted much criticism and work on the weir did not begin until 1898. This was also the year that the township of Mundaring itself was gazetted.

Hundreds of workers were required to construct the dam in the Darling Range and a tent town soon sprang up to house the labourers and their families.

Mundaring's Reservoir Hotel opened to service the workers in 1898. During the 1920s considerable extensions were made to the building, which is now known as the Mundaring Weir Hotel.

The Goldfields Water Supply Scheme, which included the concrete Mundaring Weir, eight pumping stations and a pipeline stretching over 500 kilometres to the Kalgoorlie and Coolgardie goldfields, was completed in 1903. At the time this was the world's longest pipeline and its success not only changed life on the goldfields, but with extensions it was able to revolutionise agriculture in Western Australia's inland.

O'Connor, however, had attracted heavy political and media criticism for the project during its construction and did not live to see its completion, committing suicide in March 1902.

The scheme attracted tourists during its construction and this continued after it opened, with visitors from Perth travelling by train from Perth to Mundaring and then along the branch line to see the dam and the spillway. The branch line to the weir ceased operations in 1939 and the tracks were taken up in 1952.

The Mundaring Weir was raised ten metres in height between 1945 and 1951. The original steam driven pumps along the line were replaced by electric pumps in the 1950s and 1960s. The original Number 1 pumping station (1901) 100 metres downstream from Mundaring Weir was converted to a museum in 1971.

Mundaring is located 34 kilometres east of Perth on the Great Eastern Highway. Its name is believed to derive from the Aboriginal 'Mindah-lung' which is said to translate to 'a high place on a high place'.