The town grew and consolidated through being a large railway centre between the 1890s and 1990s; now it continues to service regional rural communities.

[3] Prior to European settlement the area was inhabited for millennia by the indigenous Ngarrindjeri people, who made bark and reed canoes and lived on fish and animals dependent on the River Murray.

Major industries in the area include pig farming, dairying, and growing grains, hay and olives.

In 1926, expanded facilities were opened, including a large roundhouse, as part of the reforms initiated by the South Australian Railways Commissioner William Webb.

[9] Diesel-electric locomotives introduced in the 1950s had wider power and speed ranges, and longer distances between refuelling, reducing the need for the facilities, and when government ownership of the railways gave way at the turn of the century[10] to private operating companies running non-stop interstate freight trains, most of the facilities were demolished.

A couple of broad gauge wheat-haulage country railway lines branched off at Tailem Bend to the towns of Moorook, Barmera, Waikerie, Peebinga, Loxton and Pinnaroo.

[18] Old Tailem Town is a privately owned museum that consists of over 110 historical buildings, including corner stores, emporiums, dance halls, hospitals, dentists, chemists, barbers, butchers, bakers, saddlers, clock shops, bootmakers, pubs, stables, police stations, coach and bike shops and the Cobb & Co terminus.