Hamilton claims to be the "Wool Capital of the World", based on its strong historical links to sheep grazing which continue today.

Historical, physical items (such as the weirs and fish traps found in Lake Condah, south of Hamilton), as well as Aboriginal accounts of early white settlers, support the local oral histories of well-established, pre-European settlements in the area.

His reports of the fertility and abundance of ‘Australia Felix’ (as he called this region of Western Victoria) encouraged pastoralists to move into the area and set up large sheep runs.

Wedge infamously had a swivel gun mounted outside of his homestead to ‘deter’ the local people from approaching the house.

Regarding his extensive conflicts with the local tribes, Wedge claimed that the "depredations did not cease till many lives were sacrificed".

[7][8] The proximity of The Grange to other properties and to important routes between Portland and New South Wales, led to the gradual emergence of a small town.

The site was a local social centre and meeting point for the surrounding pastoral properties; horse races were held along the Grange Burn flat.

He completed the survey as far as Serviceton by the spring of 1847, and was then appointed District Surveyor and in 1850, laid out a township for the Grange, which he named Hamilton.

Hamilton contains a number of heritage-listed sites, including: Sheep grazing and agriculture are the primary industries in the surrounding shire, the area producing as much as 15% of Australia's total wool clip.

[20] Inside the city of Hamilton the majority of employment is provided by the retail industry (20%) and the Health and Community Services sector (14.5%).

It is significantly cloudier than Melbourne due to its elevation and westerly exposure, averaging 1,995 hours of sunshine annually.

A CFA fire base and control centre is located at the Hamilton Airport as well as a modern terminal building and toilets.

Set in 4 acres (1.6 ha), the gardens are distinguished by rare botanic species, a superbly restored rotunda, a small zoo featuring rabbits, cockatiels and budgerigars and playground and the ornate Thomson Fountain.

Sheepvention, a wool-related trade-show and exhibition is held in the Hamilton Show-grounds in the first Monday & Tuesday of August each year, and attracts up to 20,000 visitors.

The Keeping Place is a small museum and living history centre run by local indigenous people.

The teams agreed to merge at the end of the 2012 season in order to make the move to the Hampden Football League.

Golfers play at the Hamilton Golf Club[28] or at the more minor course Parklands on Boundary and Hensley Park Roads.

[29] The eastern barred bandicoot is a marsupial native to the area, and a reserve has been built to protect this and other endangered species.

In more recent decades (2007), the numbers of bandicoot (both within the reserve and outside of it) have declined significantly—to the point of nearing extinction—as a result of extended drought, and predation by introduced red foxes as well as feral cats.

Within the city, the public lands adjoining the river and Lake Hamilton have been subject to spasmodic tree-planting projects.

South West Institute of Technical and Further Education (TAFE) has a campus in Hamilton, offering post-secondary and trade courses and qualifications.

[31] Vocational training at the site is delivered by South West TAFE while master's degrees and PhDs by research are facilitated by RMIT.