The town began as a general store built by Henry Wood, to service the gold diggings around the recently discovered Morning Star Reef.

The town was subdivided into numerous suburbs, such as Waverly, Piccadilly, Killarney, Richmond, and Morning Star Hill.

In 2006 it was severely threatened but remained unharmed, whilst neighbouring town Gaffney's Creek lost a number of houses.

[4] The general store in Woods Point closed its doors in late 2010 and a smaller version opened down the main street, just over the bridge.

On 22 September 2021 at just after 9:15am, an earthquake with magnitude 5.9 struck near Woods Point, approximately 10 km (6.2 mi) below the surface.

[5] Although this was the largest earthquake ever recorded in Victoria,[6] it did not cause any significant damage in Woods Point The town now serves as a hub for recreational trail-bike and off-road four-wheel drive activities and contains one hotel and one general store/petrol station (which has closed down), Mini Golf course, tennis court and many camping areas, the most popular being J. H. Scott Reserve.