Busselton was one of the earliest settlements in Western Australia, having been settled in 1834 with the original townsite planned for Wonnerup. This area was considered too wet and low lying and the Surveyor General of the day (Lieutenant Bunbury) recommended the present area. The town is named after the Bussell family, who were among the original settlers.

One of Busselton's historic homesBeing in close proximity to the tall timber country, Busselton soon established itself as a leading port. In 1850 timber was being exported and the small town prospered. Jetties for this purpose were built at Wonnerup, Busselton and Quindalup. Of these, only the Busselton Jetty remains. At about 1,800 metres in length, this is one of the longest timber jetty structures in the world and has become synonymous with Busselton.

Today the main industries in the Shire are dairying, beef cattle, sheep, wine, mining, timber, fishing, light industry and tourism.