'[5] The township was built in the 1930s by the Hydro Electric Commission to house Tasmania's pioneering hydroelectricity officers and management.

[5][11] The area is noted for its alpine lakes and mountains, and many hydro-electric dams, canals and giant steel pipeways.

Tarraleah is located along the Lyell Highway, and is only a short distance from both Lake King William and Bronte Lagoon.

After a multimillion-dollar redevelopment,[12] the former Hydro construction village has become an estate that comprises Tarraleah Lodge with accommodation, recreation, and dining options.

Fresh water trout fishing, boating, bushwalking, mountain biking and kayaking are all popular activities in and around the township.