The Tully River (previously known as the Mackay River) was named after Surveyor-General William Alcock Tully in the 1870s. The town of Tully was then named after the river (previously it had been known as Banyan).
Tully is one of the larger towns of the Cassowary Coast Region. Prior to the shire's amalgamation in 2008, Tully was the administrative centre for the Shire of Cardwell. The economic base of the region is agriculture; sugar cane and banana being the dominant crops grown. The sugar cane grown at the many farms in the district is processed locally at the Tully Sugar Mill to give raw sugar which is shipped elsewhere for refinement.