Lilyvale became an isolated rural area at the north of the Bulgo Valley along the Hacking River.

The village began in 1884 as a railway construction camp and then served the Metropolitan Colliery, a timber mill at what is now Karingal Flat in the Royal National Park,[2] associated railway sidings, cattle grazing and orchard farms.

Town subdivisions were laid out above Lilyvale railway station and on Karingal Flat below.

The village and locality were briefly revitalised by the re-alignment and duplication of the railway line from 1914 to 1920 and became a depression camp in the 1930s.

Much of the surrounding colliery land, once used for forestry and farms was resumed and became Garawarra State Conservation Area in 1987.