[6][5][1] The town which is located on the western side of Murat Bay has extensive European history, first built on in 1889, and now hosts a large expanse of oyster farms, one of the largest on the Eyre Peninsula.

Flinders named the inlet "Denial Bay" because of "the deceptive hope we had formed of penetrating by it some distance into the interior of the country".

[10] The first European exploration of the hinterland was in August 1839 by John Hill and Samuel Stephens, using the chartered brig Rapid as a base.

McKenzie nearly single-handedly set up the town, clearing mallee scrub by axe, building a general store and becoming the local harbour master, postman, blacksmith, butcher, saddler and Justice of the Peace, employing up to 30 people at any one time.

[13] The town established primarily as a loading and offloading point for the various inland farming activities, and this was done using a unique system based on the rocky floor of the bay's seabed.

[citation needed] The economy of Denial Bay now depends heavily on the production of Oysters by aquaculture, as well as minor inputs from tourism.

[17] Tourism in the town is centred around recreational fishing and other marine based activities such as snorkelling, scuba diving, swimming and even surfing along some parts of the coast.