There was one of the Western Australian Government Railways isolated branch lines between Hopetoun and Ravensthorpe.

A temporary pastoral lease ("Free Run") was registered by James Dunn senior in 1868.

His five sons and daughter started sheep farming at the property, Cocanarup (20 km west of the present town), in 1871, after George and John Dunn drove a herd from Albany.

Agriculture in the area began to grow following the Great Depression and pastoral land releases occurred in the 1960s and 1970s.

[16] BHP Billiton commenced a feasibility study in 2002 into opening a nickel and cobalt mine and processing plant[17] 35 km east of the town.

The plant known as the Ravensthorpe Nickel Project was commissioned in late 2007 with first production occurring in October and the first 5000 tonnes being produced by December 2007.

[21] On 9 December 2009, BHP sold the Ravensthorpe mine, on which it had spent A$2.4 billion to build, to Toronto-based First Quantum Minerals for US$340 million.

In January 2017 the first shipment of 10,000 tonnes of lithium concentrate was consigned from Esperance to Lianyungang, China.