Lying in a gap in the surrounding hills, Lumsden is the location of a major junction on State Highway 6.

When this name was given to the then new railway station, residents of Castlerock, then also known as The Elbow and on the opposite bank of the Ōreti River, brought the matter to George Lumsden of the Otago Provincial Council.

[4] In 2017, it was suggested that Lumsden is becoming a satellite town for Queenstown, despite the 100 km (62 mi) commuting distance.

It was much cheaper to buy or rent a house in Lumsden and work in Queenstown where wages are potentially higher.

In 1971, most of the Waimea Plains Railway closed, but sixteen kilometres from Lumsden to Balfour remained open until 1978.

The Lumsden Heritage Trust, formed in 2013 has recovered and restored original carriages and trains.

It has displayed the chassis of New Zealand Railways steam locomotive P 60 at the town's southern entrance, as well as two unrestored locomotives, V 126 and V 127, two Drewry diesel shunters and three wagons by the old station, to commemorate its former prominent status in New Zealand's national rail network.

In April 2022 a historic 1883 A Class 199 elevated roof passenger carriage was added to the Lumsden Railway precinct.

Although some people chose not to answer the census's question about religious affiliation, 55.5% had no religion, 31.1% were Christian, 1.2% were Hindu, 0.6% were Muslim, and 0.6% were Buddhist.