Busselton is one of the earliest settlements in Western Australia, having been settled in 1834 with the original townsite planned for Wonnerup. This area was considered too wet and low lying and the Surveyor General of the day recommended the present area.

The town is named after the Bussell family, who were the first settlers of the region.

Being in close proximity to the tall timber country, Busselton soon established itself as a leading port. In 1850 timber was being exported, the small town prospered and jetties for this purpose were built at Wonnerup, Busselton and Quindalup. Of those, only the Busselton Jetty remains.

The main industries in the City are tourism, beef cattle, sheep, wine, timber, fishing and light industry. More recently the provision of regional airport services and support for the States mineral resource sector has resulted in a reliable Fly In Fly Out workforce emerging as a key economic industry for the region.

Over the past decade Busselton and Dunsborough have been named Top Tourism Town on several occasions.