The Moner balug clan of the Wathaurong Aboriginal people called the area Trawalla, which means 'wild water'[2] or possibly 'much rain'.

The first European settlers to arrive in the area were squatters, Kenneth William Kirkland, his wife Katherine KirklandKatherine (née Hamilton), their daughter Agnes Anna, and Katherine's brothers Robert and James McGregor Hamilton,[5] and they established sheep and cattle grazing runs.

[6] Trawalla Post Office opened on 3 December 1864 at the time of closer settlement and closed 13 July 1974.

Trawalla is the birthplace of Australia's ninth Prime Minister James Henry Scullin, commonly known as Jim.

James Scullin attended small state schools, first at Trawalla and later at Mount Rowan near Ballarat.