It is in the Shire of Moyne local government area located amidst rolling green pastures on the north rim of Tower Hill.

[3] The first confirmed European sighting of the area was of Tower Hill, the nearby inactive volcano, in 1802, by French explorers aboard Le Géographe, captained by Nicolas Baudin.

A strong and obvious links between Koroit and Ireland is the potato crops grown in the rich volcanic soil surrounding the town.

[citation needed] What became the Port Fairy railway line was extended to the town from Warrnambool in 1890, along with a branch to Hamilton, both being closed in 1977.

Tower Hill is an extinct volcano formed at least 30,000 years ago when a hot rising basaltic magma came into contact with the subterranean water table.

Artefacts found in the volcanic ash layers show that Aborigines were living in the area at the time of the eruption.

Tower Hill has always been public land, initially reserved as an Acclimatization Zone in 1866 it was declared a State Forest in 1872.

To ease the burden on ratepayers, the Borough was forced to collect royalties from quarrying of volcanic road-making material and grazing leases.

Charles Pye, an English recipient of the Victoria Cross, died in Kirkstall on 12 July 1876 and is buried at Tower Hill.

The epitaph, believed to have been written by Henry Lawson, reads: "Erected by his fellow unionists and admirers in memory of their comrade, William John McLean who was shot by a non-unionist at Grassmere, New South Wales, during the bush struggle in 1894 and who died 22 March, aged 26 years.

Nobel Prize-winning Australian biologist Sir Macfarlane Burnet's mother, née Hadassah Pollock Mackay, was born in Koroit in 1872.

The Koroit railway station began operations in 1889, with a brick building replacing an original timber structure in 1907.

Within the town, the Koroit Botanic Gardens form part of a large, central recreational area, and were designed by notable landscape architect, William Guilfoyle.

From a three-hectare site on Commercial Road, the company runs a fleet of tankers collecting milk from suppliers throughout Western Victoria and South Australia.

The 30 km recreational trail starts at Lake Pertobe in Warrnambool, passes through fertile farmland to Koroit (with a connection to Tower Hill) and finishes at the fishing village of Port Fairy.