[1][2] Gold was discovered in the area in 1895, and in 1896 the local provisional committee lobbied the government to perform a survey and declare a townsite.

[3] In 1900 the town was incorporated and had kerosene street lights and a swimming pool.

The town derives its name from a geological feature located just outside the town called Mount Malcolm, which was named by John Forrest while he was exploring in 1869.

Forrest had named the feature after his friend and fellow explorer Malcolm Hamersley.

The total area of the town was 259 hectares (1 sq mi).