Bonnie Doon is 168 kilometres north-east of Melbourne via the Melba Highway.

The Post Office opened on 1 October 1866 and was renamed Bonnie Doon in 1891 coinciding with the arrival of the railway.

[2] Much of the original town of Bonnie Doon was flooded by the construction of Lake Eildon in the 1950s.

The township was relocated; some buildings were picked up and moved, whilst others were able to remain in their original site, such as the churches.

Lake Eildon makes Bonnie Doon a minor tourist town for water activities, and the surrounds of Bonnie Doon, which has a rail trail, are somewhat popular for weekend holidaymakers.