The township is located at the base of Mount Noorat, a dormant volcano, which is considered to have Australia's largest dry crater.

Europeans first settled the Noorat area in early 1839 when MacKillop and Smith established a run called Strathdownie – which was renamed Glenormiston by Niel Black, a Gaelic-speaking Scotsman from Cowall in Argyll who purchased the property in 1840.

Prior to European settlement, the area near Mount Noorat was a traditional meeting site where Indigenous tribes – the Kirrae Wuurong people – held ceremonies, bartered goods and settled disputes.

An outbreak of smallpox during the 1830s was one cause of the population decline and it has been suggested that an alleged massacre of Indigenous people by white settlers was another.

The Glenormiston campus of South West Institute of TAFE is located a few kilometres north-east of the township, on the other side of the mountain.