The station first opened in 1896 on the Perth to Midland railway with two side platforms and an adjacent goods yard.

A second rebuild of Bayswater station began in January 2021 in order to increase the number of platforms to four to accommodate the under-construction Airport and Ellenbrook lines, and raise the height of the nearby 3.8-metre-high (12 ft) low-clearance Bayswater Subway to 4.8 metres (16 ft).

Outside the station's main entrance will be two seating sculptures by Miranda Farmer and Jason Hirst, named Kaarl and Kiep, the Noongar language words for fire and water.

In several locations around the station will be murals by Andrew Frazer and Jade Dolman featuring the Noongar place name for Bayswater, Biraliny.

On the noise walls along the railway line are paintings of local flora and fauna by Joanna Brown.

The railway line reduced what was previously a several-hour long trip from Bayswater to Perth or Guildford to twenty minutes, which provided an opportunity for development in the area.

[17] In 1935, road board members described the approach to the station as in a "rough and disgraceful condition, and that part of it was sometimes underwater".

There was also a pedestrian level crossing to the east of the station, which provided access north and south.

Federal Labor candidate Tim Hammond said that the tunnelling works for the Forrestfield–Airport Link presented a “once-in-a-lifetime” opportunity for rebuilding Bayswater station underground as well.

Labor later won the election, setting into motion the planning for the Bayswater station upgrade.

The project's budget had increased to $86 million; construction was scheduled to start in 2019, and finish by the end of 2020, before the opening of the Forrestfield–Airport Link.

This allows the station to be on a straight section of track, keeping the gap between the platform and train to a minimum.

The scope also includes a turnback siding between Bayswater and Meltham stations, to be used during partial line shutdowns.

[31] Sinking the station was ruled out, as it would require the rebuild or closure of Meltham station; it would cause major disruption to the Midland line, with services cancelled for a significant amount of time; the design of the Forrestfield–Airport Link tunnel portal in Bayswater precluded sinking Bayswater station; and the regional diesel trains that run along the Midland line, such as the Indian Pacific and The Prospector, would require complex ventilation in a tunnel.

[34][35][36] Local residents and community groups criticised the concept design for the size of the bus interchange, the disconnection of Whatley Crescent, the need to remove significant trees, and that the station would be surrounded on all sides by roads.

Community group Future Bayswater proposed an alternative road layout, that had the intersection of Whatley Crescent, Railway Parade, King William Street, and Coode Street underneath the station overpass, removing the need for Beechboro Road South to pass under the railway to the east of the station.

The alternative design also had Whatley Crescent east of King William Street be a shared space or shared street, allowing local residents to drive through but helping to allay the problem that the station is surrounded on four sides by roads.

[43][44] In January 2020, a kurrajong tree was relocated by a crane from Bayswater station to Bert Wright Park.

Paul Shanahan, chairman of Future Bayswater, said the design lacked architectural merit and had become a "social media joke".

Opposition transport spokesperson Libby Mettam said that "despite months of community consultation over the design and aesthetics, the final plan has been compared to four trestle tables slapped on top of a freeway overpass".

[57] Even the member for Maylands and government MP Lisa Baker privately criticised the design to Rita Saffioti, the Minister for Transport.

[59][60][61] Just before Christmas 2020, the development application for the station received conditional approval from the Western Australian Planning Commission (WAPC).

[66] Residents and businesses have also made complaints about construction staff using parking meant for customers, although the Public Transport Authority has debunked those claims.

Surveys undertaken by the Public Transport Authority show that the Bayswater station project has an 80% approval rating in the area, however there is a small, vocal group of people who are negative about it.

[85][86] The shutdown involved demolishing the previous station and bridge, replacing 1.8 kilometres (1.1 mi) of track, expanding the Leake Street pedestrian underpass, construction of the turnback siding, piling works for the two northern bridges and piling works for the Ellenbrook line viaduct.

[82] Local businesses, including the Bayswater Traders Association, asked the state government to reconsider the length of the station's closure and the staging of associated road closures and have threatened a mass compensation claim for lost business.

[87][88] In the May 2023 state budget, a $107.4 million cost overrun for the Bayswater station project was revealed.

[101][102][103] DevelopmentWA said the purpose of the redevelopment area was to "maximise development opportunities arising from the station upgrades and help create a well-designed and connected community hub."

[106] The redevelopment scheme was formally adopted in May 2021, transferring planning authority from the City of Bayswater and the WAPC to DevelopmentWA.

The CircleRoute 998/999 also operate at Bayswater, and the Rail Replacement bus stops moved further closer to the station on the east side on Railway Parade.