New Zealanders know the town for its mineral springs, which in the past provided the water used in a local soft drink, "Lemon & Paeroa".

The town stands at the intersection of State Highways 2 and 26, and is the central service location for the Hauraki District.

[10][8] Captain James Cook explored the Waihou River in 1779, taking a long-boat up as far as Netherton, just a couple of miles from where the town of Paeroa was built 100 years on.

[11] Samuel Marsden visited Raupa settlement in June 1820 for missionary work, and was impressed by the scale of wooden buildings he saw, and the number of people who settled in the area.

[10] In 1830, Ngāti Tamaterā returned to the area after the Battle of Taumatawiwi, however settled further south than the original settlements, and used Te Raupa as a burial site until the 1850s, when the iwi converted to Christianity.

[9] The area was briefly explored in October 1826 by Captain James Herd, in command of the Lambton and the Isabella (or Rosanna).

Herd was sent on an exploratory mission by the first organisation to be known as the New Zealand Company and claimed to have bought one million acres (400,000 ha) of land from local Māori in Hokianga and Manukau.

[11] By 1869, anticipating the rush to the Ohinemuri Goldfields, considerable numbers of miners camped at Cashell's Landing "Puke".

[clarification needed] In 1870, Asher Cassrels, a Lithuanian, leased the block of land known as Paeroa from Māori.

When James Mackay (surveyor) and Sir David McLean (Minister of Mines) completed negotiations six years later with the Māori Chiefs, Tukukino and Taraia, the fields were declared open.

Heavy machinery required for hard quartz mining had to be brought via the Waihou River and up to Paeroa.

The river was the only highway and with two shipping companies in operation, Paeroa became a thriving transport and distribution centre.

When the Northern Steamship Company combined with its opposition, the wharves from near the Bank of New Zealand (Wharf Street) had to be shifted two miles (3.2 km) downstream in 1892, and eventually to just below Puke Bridge due to the silting from mining operations.

A historic Paeroa building, in the town centre, is the former National Bank of New Zealand's gold refinery, built in 1914 in Willoughby Street.

[citation needed] In the early 1900s, the Waihou River near Paeroa was straightened by making a canal, in order to protect farmland from flooding.

When transport operator Sarjant's amalgamated with Brenan,[14] a large truck centre evolved in Paeroa.

[citation needed] As the passenger rail service dwindled, Paeroa eventually lost its railway, so much of the town had its beginnings in supply and transport to the Hauraki and District.

Two marae (tribal meeting grounds) of the Ngāti Tamaterā are located in Paeroa: Taharua and Te Pai o Hauraki.