Gold was discovered near the present town site in 1896 by a team of prospectors, Henry Lilley and his party, who pegged the Lily of the Valley lease. Their lease was later taken over by E. A. Morgans. The mine developed here was the Westralia Mt Morgans mine.

In 1898, the Westralia Mount Morgans Company was floated in Bombay India to English investors with 120,000 pounds capital. It was subsequently based in London. Alfred Edward Morgans was the main director from its inception and was involved with the company until the bitter end.

The townsite was gazetted in December 1899 and, in September 1900, was incorporated. It was named after Morgans who had been elected as the MLA for Coolgardie in 1897. He became Premier on 21 November 1901 but was defeated in the Legislative Assembly on 23 December 1901. This is the shortest term of any Western Australian government.

By 1903, the population had reached 1,250 with over 500 buildings situated in the town. The town boasted six hotels, a hospital, a workers hall, four general stores and two chemists, a school, tobacconist, stationer, hairdresser, butcher and baker. There was also a newspaper, brewery, ice works and cool storage house. The water supply came from wells, which were slightly brackish. Electricity for the town’s street lights was supplied by The Westralia Mine and Mount Morgans was the first town in the Eastern Goldfields to get the technology. There were six Councillors and a Mayor. There was a galvanised iron Council Chambers at this time. Police were stationed there from August 1899. However, it wasn't until 1901 that a Police Station building was erected.

On 20 December 1902, permission was granted for the construction of the Malcolm-Laverton railway and in 1903 the arrival of the railway at Mount Morgans coincided with a peak in gold production. Mount Morgans was a large station between Kowtah and Hawkes Nest on the Malcolm to Laverton branch of the ‘EGR’ (Eastern Goldfields Railway). Rail connections to both Kalgoorlie in the south and Leonora could be obtained from Malcolm’s busy rail junction.

Initially, the company was very successful and for a short time in the early 20th Century, the Westralia Gold Mine was considered the richest in Western Australia.

From 1904, things started to go downhill. The Main Lode disappeared under 200 feet and could not be relocated. 240 employees were sacked. In 1905, expenses outstripped income by 6000 pounds, and the company was overdrawn at the bank by another 7000 pounds. In 1909, the company was reconstructed, despite a shareholder revolt.

In 1911, the town’s biggest employer, the Westralia Morgans Mine, went into liquidation. The mine was closed between 1910 to 1913. A new company took over the lease and by 1914 the mine was back in production until 1928.

The town was in deep decline in 1937 with a visiting police commissioner announcing the town was dead in July of the same year but the townsite survived until 1952.

Employing modern open-cut mining methods, the mine reopened in 1988 for nine years and, after another long closure, went back into production in 2009. The mine still produces gold today.