Aboriginals first came to the place they called "cavvanbah" which means “meeting place”. Captain Cook noticed Cape Byron as he passed by in 1770, and it was he who named the location. However, it was not settled by Europeans until nearly a century later.
The area where the town now stands was originally a swamp, a little of which remains on the eastern side. The village of Cavvanbah was surveyed in 1884 and the jetty built in 1886. The railway came in 1894 and the name then changed from Cavvanbah to Byron Bay .
The early growth was dairy and a number of separating stations were established. A co-operative was formed in 1895 to provide cold storage for perishable goods from the district, to manufacture, store, sell and export milk and dairy products. The factory over the years expanded to become the biggest butter factory in the southern hemisphere.
A jetty was built at the end of the nineteenth century and a steamer service provided to Sydney . Then Byron Bay became a whaling town and a whaling station was built at Belongil Beach . In 1921, the S.S. Wollongbar, a passenger liner which could accommodate 300 passengers, was wrecked here just off Belongil Beach . It remains buried in the sands, causing a surf break by its presence, but all that can be seen are the boilers, visible at low tide.
In 1973 hippies discovered Byron Bay and still come to Byron Bay . In recent years the developers have moved in and major developments have been taking place in what was once a quiet seaside village and now a significant coastal resort.