Europeans first visited the site in 1938-39[1] A radio camp and airstrip were established in 1938-39 but restrictions on transportation and the surrounding land's infertility long inhibited Wabag's development.

A regional outpost of the Western Highlands District under the Australian Administration of Papua and New Guinea, shortly before Independence in 1975 much of the Enga-speaking region of the Western Highlands was separated into a discrete District and then, at Independence, Province with Wabag as the Provincial Headquarters.

There is a dense rural population and coffee and pyrethrum are widely grown in food gardens as cash crops though depredations during tribal fights and difficulties in marketing have inhibited the development of a significant commercial agriculture sector and in any case it is Mount Hagen, not Wabag, that is the commercial metropole.

Law and order problems, considerable violent crime and chronic house break-ins have continued to compromise the amenity of town life.

The original airstrip is closed but Air Niugini run regular flights to Port Moresby from Wapenamanda Airport about 40 minutes away by road.