The suburb is one of the most historic sites in Australia's colonial history, being one of the five Macquarie towns officially proclaimed on 6 December 1810.

[3] Governor Lachlan Macquarie recorded the following in his journal "the Township for the Evan or Nepean District I have named Castlereagh in honor (sic) of Lord Viscount Castlereagh",[3] Secretary of State for War and the Colonies 1805–1806.

The earliest known European development was the building of Hadley Park, between what is now Castlereagh Road and the Nepean River.

[4] Nepean Park, c. 1822, is also situated on Castlereagh Road, and was built by convict labour for John Single.

The suburb's historical importance is reflected in its many surviving farmhouses, outbuildings, churches and cemeteries.

[1] Castlereagh Road is one of the important transport links in Sydney connecting the Hawkesbury and Penrith regions.