Townsite lots were surveyed at this place by Surveyor W.F. Rudall in 1909 after the Lands Department became aware that the site was planned as the terminus of the "Pinjarra-Marrinup Railway". Names suggested for the place by Rudall were "Dwellingerup" or "Marrinup", after nearby brooks, or "McLarty" after a local MLA who had been very active concerning the railway. Surveyor General H.F. Johnston chose "Dwellingupp" after being misinformed regarding the spelling of Dwellingerup Brook. Ignoring a suggestion from the Under Secretary to amend the name to "Dwellingdown", the Minister for Lands approved the name as "Dwellingup" in December 1909. Eventually, the spelling "Dwellingupp" was chosen by order of the Under Secretary for Lands, and the townsite was gazetted as Dwellingupp in February 1910. The spelling was amended to Dwellingup in 1915. Dwellingup is an Aboriginal name said to mean "place of nearby water".
In arguably Western Australia's worst bushfire, many small surrounding communities in the area were destroyed including 132 houses in Dwellingup itself in the fires of 1961. Fortunately there were no fatalities, but 800 people were left homeless. The town was rebuilt.
Dwellingup is the home town of actor Thomas Vowles, who attended the local Primary School for all his Primary School years, and lived at Holyoake Road.
Dwellingup is also home to Nanga Bush Camp, a popular camp for senior primary schools & high schools. Some of the activities at Nanga Bush Camp include water rafting, night watching, a swimming area, and bush tracks etc.
Dwellingup experienced serious bushfires again over the weekend 3/4 February 2007. At least 14 houses were reported to have been destroyed. There was no loss of life.
