Mandurah's first European to settle in the area was a man named Thomas Peel. He named the area Mandurah which was derived from the Aboriginal word 'mandjar' which meant 'trading place' or 'meeting place'.
Peel, a cousin of the famous British Prime Minister Robert Peel, had developed a scheme to settle 10 000 people in Mandurah-Pinjarra district and the British Government granted him 1 million acres to do so. While preparing to sail to Western Australia, the Secretary of State for the Colonies, Sir George Murray, insisted that the colony be started by 1 November 1829. Unfortunately Peel arrived late and his grant was cut to 250 000 acres. The scheme came to fruition on 15 December 1829 when 169 settlers arrived at Cockburn Sound, north of Mandurah. Although Peel's proposal looked good on paper in reality it did not work. These first settlers were left on the beach until Peel decided to move south to Peel Inlet. A few followed him but most were disenchanted with the scheme and moved north to the Swan River colony.
When Peel finally got organised his plan did enjoy a little success. To his credit the early development of the Mandurah area was mostly his doing. He sold land, surveyed roads, and imported stock and the tiny settlement struggled on. In 1850 it was connected to Perth by a coastal road and in 1876 an inland road was completed. The arrival of the railway in 1893 saw Mandurah decline in importance. The railway passed through good inland pastures which new settlers preferred to the poor coastal soils.
For the next fifty years Mandurah, deprived of its role as a port, declined. By the 1950s it was nothing more than a tiny fishing village. The combination in the 1950s of an increase in tourism (especially day trippers from Perth) and the development of Kwinana as a major industrial centre, saw Mandurah grow rapidly. The development of the town was further assisted by the establishment of the alumina refinery at Pinjarra in the early 1970s.