Before 1840 the area bounded by the Latrobe, Thomson, Macalister and Avon Rivers was occupied by small groups and families of the Briakolung tribe of the Gunai or Kurnai people; little physical evidence remains of their occupation apart from scar trees, grinding rock sites and the appearance of an occasional stone implement.

The first known Europeans appeared in January 1840 when Angus McMillan’s party reached (and named) the Macalister River downstream from the current town site; Paul Strzelecki’s party appeared some weeks later.

NSW squatter, Lachlan Macalister, established the Boisdale Run opposite Angus McMillan’s Bushy Park in 1840; this consisted of 57,600 acres between the Avon and Macalister Rivers; the run was purchased by John Foster in 1850.

The original “Mafra” (with one -f-) was a sheep fold located on this run several kilometres south east of the present town of Newry; it was named after one of Macalister’s properties in NSW, which was in turn named after a town in Portugal where Macalister’s regiment had been stationed during the Napoleonic wars (though Macalister himself would have been too young to have participated in that war).

The present town site was originally the 640 acres (one square mile) of the Green Hills Native Police Reserve; a police barracks operated here from 1844 to 1852.

Land sales after 1860 broke up the original big estates and within ten years the best agricultural land had been reduced to allotments up to 640 acres in size.. Anticipating the advantages of gold discoveries in the mountains to the north and west, a group of Stratford businessmen urged the government of the day to create a settlement on the Macalister beside the river crossing; the former police reserve was surveyed as a town in 1863 by George Hastings, who was responsible for adding an -f- to the name and applying “Maffra” to both the town and surrounding parish. The first town lot sales took place in 1864.

During the 1870s there was a building boom and the town become a service centre for the growing beef cattle industry; there were shops, schools, churches, a flour mill, a brick works, cheese factories and public buildings.

The stock and station agency A.McLean & Co was established in 1872; later Allan McLean entered the Victorian Parliament and was Premier for a short time just before Federation.

The town became the centre of the Shire of Maffra, proclaimed on 14th October 1875, and the first municipal offices were constructed; by 1880 there were said to be 3000 people living in the shire.

As well as beef cattle the district produced wheat, oats, barley, peas, forage and hops; livestock included sheep, pigs and horses for the carriage trade and Indian army.

The railway reached Heyfield in 1883, was extended to Maffra in 1886 and reached Briagolong in 1889; this expansion created increased financial opportunities for the district.

A beet sugar industry was established in the 1890s and became a major employer in the town; it lasted until 1948.

The decades of the twentieth century up until World War 2 were ones of consolidation rather than ones of major change:

• Electricity arrived in 1913
• A major fire on Christmas Eve, 1913, burnt out one whole block of shops in the main street
• An irrigation scheme was commenced on the Macalister River in 1919 at Glenmaggie; water flows after 1926 boosted the dairy and sugar beet industries
• Closer Settlement Schemes at Boisdale, Newry and Kilmany introduced the era of the small farm; later many were found to be uneconomic and a period of consolidation led to the farm sizes of today.

With improved transport, it became possible to close smaller cheese and butter factories in the surrounding districts and concentrate manufacture in Maffra itself:

• the Maffra Co-operative Milk Products Company Ltd was formed in 1918
• the Nestle Company bought out a former butter factory in 1921
• the Willsmere Certified Milk Company opened a factory in 1922