Different parts of the current Mount Evelyn area were first known as Olinda Vale, Billygoat Hill, McKillop/Valinda and South Wandin.

[2] The town experienced a boom in the early 1930s due to the construction of the nearby Silvan Dam and Mount Evelyn Aqueduct, but was greatly affected by the depression of the same period once this project was completed in 1932.

Together with the nearby settlements of Belgrave, Monbulk and other towns, the region developed a tourism industry that persists to this day.

The town's reserves were also incorporated into the larger Dandenong Ranges National Park in the southern part of the suburb.

This was changed to 'Evelyn' after the county in which it is centrally placed, possibly as part of an attempt by the Victorian Railways to shorten names of stations.