Prior to European settlement the area was occupied by the Dhudoroa Aborigines. The first white people in the Ovens Valley were the pastoralists who arrived in 1837-38. John Hillas built huts and stockyards on the banks of Myrtle Creek in 1837, near the present Myrtleford Hotel, the area being part of a remote cattle run known as the Myrtle Creek Run.

Forming the boundary of the run, the Myrtle Creek was given its name by the first Europeans in the area. When gold was discovered in the Buckland Valley, thousands of diggers had to cross Myrtle Creek on their way to the goldfields. The creek was named after the myrtle trees growing there but has since been renamed Barwidgee Creek. A small township developed around the fording place, with the name of Myrtleford consequently adopted. The road through Myrtleford was then called the Buckland Road; it is known today as the Great Alpine Road.

The first localised mining rush occurred along Happy Valley Creek in 1856 with reef mining soon commencing at Gapstead. The town was surveyed and named in 1859.

Myrtleford survived the decline of gold mining due to the early establishment of hop and tobacco production. Chinese settlers,the Pan Look family, were, for many years, the largest growers. The1930s and 1940s were hard times for the town but, after World War II,new methods and strains of tobacco were introduced and a Tobacco Research Station was established. Southern European migrants also settled in the area in the postwar years, involving themselves in the tobacco, hops and walnut industries.

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