The district was named for the South West town of Capel, located between Bunbury and Busselton, which fell within its borders.
The seat was abolished after only one term at the 2007 redistribution, taking effect from the 2008 election due to the one vote one value legislation.
Capel was created out of parts of Collie, Mitchell and Vasse, accounting for significant population growth in the Busselton-Dunsborough area which had seen Vasse contract to those areas.
[1] The seat was first contested in the 2005 election at which Liberal member Steve Thomas was successful.
Major centres included the Bunbury suburbs of College Grove, Dalyellup, Davenport, Gelorup, Usher and the southern parts of Withers, and the towns of Balingup, Boyanup, Capel, Carbunup River, Donnybrook, Kirup and Yoongarillup.