The bushland gives the small suburb a natural surrounding and walking tracks lead from it into the neighbouring national parks.

A large number of railway construction workers were needed for the extensive excavation and tunnelling works beyond Waterfall to the south.

McKell Avenue, the southern border of the Royal National Park, was originally called Waterfall Road.

In 1973 Australia's first Community Advanced Driver Training Centre was opened in Waterfall but closed a few years later.

On 3 November 1980, five volunteer firefighters were killed by a fireball that engulfed them and their truck on the Uloola track just east of the settlement.

Carriages jack-knifed in spectacular fashion onto the platform, causing demolition of a concrete ramp to the overbridge and part of the station canopy.

The cause of G7's crash was determined to be the heart attack of the driver and a failure of the safety equipment and the guard to stop the train.

Waterfall is connected by a pair of hiking trails, the Couranga and Lake Cooloomba, which lead through vast tracts of bushland within two national parks.

Waterfall also has an unmarked track along Kangaroo Creek, that leads up to the popular swimming hole, Karloo Pool.