The first European visitor to the area was Charles Cooke Hunt, who explored the area in 1864 and recorded the name Cunderdin, from the Aboriginal name of a nearby hill. The meaning of the name is thought to mean "place of flowers".
Like many small towns in the area, Cunderdin developed as a stop-off town during the gold rush in the WA Goldfields. Significantly in 1894 the railway arrived signalling the earliest settlement in the town. Later, in 1901, the Goldfields Water Scheme designed by C. Y. O'Connor led to a renewed increase in population of the town. The townsite was gazetted in 1906.
In 1932 the Wheat Pool of Western Australia announced that the town would have two grain elevators, each fitted with an engine, installed at the railway siding. An elevator was duly erected the following year next to the Westralian Farmers grain-shed.
In late 1933 the local tennis courts were first opened in front of a crowd of about 100 players, a tournament was held the same afternoon. The local hospital also had a X-Ray plant installed and commissioned a week later.