It is acknowledged that the town of Coolah is located on the lands of the Wiradjuri and Kamilaroi peoples. The valley was used as a meeting ground for people of both nations. The name Coolah is probably a corruption of the Kamilaroi word meaning ‘valley of the winds’.
The Coolah valley was first explored in the 1820s by the pastoralist William Lawson who made a series of expeditions to find a suitable route over the Liverpool Ranges to the lush pastures of the Liverpool Plains beyond. In this he was unsuccessful with the route finally discovered in 1823 by the botanist Allan Cunningham through, what he named, Pandora Pass. In an attempt to control the spread of settlement to the west Governor Darling issued a Government Order in 1826 defining the limits of location beyond which land was to be neither sold nor settlers allowed. Part of the northern boundary extended along the Black Stump run, to the north of Coolah, and squatters beyond this boundary were said to be ‘beyond the Black Stump’.
Because of two large permanent water holes in the Coolaburragundy River the town became a resting place for those persons travelling from the Hunter and Bathurst to take up land further north-west on the Castlereagh River or on the Liverpool Plains. An enterprising blacksmith James McCubbin, when hearing that a settlement was beginning to take place at Coolah, recognised its potential and moved there in about 1847, later purchasing 160 acres freehold in 1857. Much of his purchased land encompasses the current town.
By 1866 the population was about 60 persons. A provisional school with 18 pupils was opened in 1868, a police station was established in 1874, with a combined station, court house and residence later constructed in 1880. Coolah made rapid progress in the early Twentieth Century. The Coolah Shire Council was declared by Government proclamation in 1906 with J. McMaster serving as the first Shire President. The Coolah branch of the Wallerawang-Gwabegar line opened in 1920 with the last train running in 1982. Between the 1940s and 1990s the nearby Coolah Tops, previously set aside as a timber reservation in 1886, became the principal supply of ironbark sleepers for the railways in the western district and the timber industry was a major employer in Coolah and served as a sound economic base for the town. The Coolah Tops National Park was established in 1996 and is now a major tourist attraction for visitors to the Coolah region.