Part of the historic county of Montgomeryshire (Sir Drefaldwyn) from 1536 to 1974, it lies on the River Dyfi and was once a port serving the market town of Machynlleth.

This new transportation route enabled Derwenlas to develop as a port as it was the highest point on the Dyfi that was navigable by coastal ships - boats of up to 70 tons could reach there at high tide.

Incoming goods included gunpowder to be stored in Morben Quarry, lime and coal for the limekilns at Pentre Cilyn, rye, wheat and hides.

With ever increasing demand for water transport, shipbuilding began at Derwenlas, with three separate builders established by the quays.

[1] In 1863, the Aberystwith and Welsh Coast Railway extended the standard-gauge rails west of Machynlleth and, on reaching Derwenlas, built the new line across the bend of the river by filling in the channel and creating a new course for the Dyfi, in the process cutting off Derwenlas' quays from the river channel and killing off the port.