In 1841 an early settler, James McFarlane, described the district as resembling "a field of waving corn", and called it "Hayfield".

[3] In 1866, McFarlane's property was taken over by James Tyson, a former member of the Queensland Legislative Council, a pastoralist, and considered Australia's first self-made millionaire.

The town grew up as a stopping point for diggers on their way to the Gippsland goldfields, and the Post Office opened on 24 September 1870.

[6] The author Mary Grant Bruce started writing her Billabong series of books in 1910 while staying at James Tyson's former house.

The poet Shaw Neilson spent some time in the Heyfield area in the 1920s, where he wrote several poems and helped in the construction of the Lake Glenmaggie weir wall.