Yalup Brook is situated about 5 km (3.1 mi) north of Yarloop and there is similarity in pronunciation of the word, and the early spelling variations of the siding (Yailoup and Yarloup) support it being Aboriginal.

He was followed by W. J. Eastcott, who used to collect river red gum bark and pit-sawn timber for other settlers, and John Bancells in 1886.

In 1901, they made Yarloop the centre of their operations, and the town became even more important when in 1905 they closed their Denmark mills on the south coast.

Facilities included a primary school, local shop, bowling club, hotel, post office, community centre and various types of accommodation.

A notable issue in the town was alleged emissions from the Alcoa alumina refinery at nearby Wagerup.

[17] However, Western Australia's Premier Colin Barnett said that the town would be rebuilt, and a majority of residents voted in favour of rebuilding.

[21] Yarloop is situated on the South Western Railway, and is a stopping place for the Australind passenger train from Perth to Bunbury.