The origin of the name Coolum appears to be derived from the Aboriginal word 'gulum' or 'kulum' meaning 'blunt' or 'headless'. This is assumed to refer to the shape of Mount Coolum, which has no peak. According to Aboriginal legend, Ninderry knocked off Coolum's head and it fell into the ocean and is now Mudjimba Island.
The Coolum district was the traditional land of the Inabara or Yinneburra clan of the Undanbi Tribe. In turn, they were part of the larger group of the Kabi Kabi.
In 1823, the first Europeans to pass through Coolum were castaways and shipwrecked sailors. The first land selection in Coolum was made in 1871 by Grainger Ward - a pastoral lease of 255 hectares. Here, Ward ran upwards of 300 head of cattle. In 1881, Mark Blasdall selected his own lease of 252 hectares. Blasdall was the first to plan sugarcane in the area and to cut timber. He built two huts and a sawmill aswell as clearing Coolum Creek, thus enabling steampships to enter to load timber and deliver supplies. By 1882 the steampships 'Tadorna Radjah' and 'Gneering' began to regularly travel from Brisbane to Coolum creek. In 1883 the first Coolum land was freehold and by 1884, Blasdall was declared insolvent and his land freeholded.
The first permanent settler of Coolum was William Perry-Keene and his family in 1905. His home was called 'Green Hills' and was situated at the corner of Beach Road, DAytona and Key West Avenues. Between 1906 and 1912 many people setlled permenantly in the region. By 1912 there were eight to 12 families living in the district. In 1909, Coulsin established a mailboat service on the Maroochy River. This provided the first regular connection between Coolum nd the railhead at Yandina. In 1911, a horse-drawn tramline and punt loading facilities were built at Coolum Creek.
Construction of the first trafficable road to Coolum was undertaken between 1922 and 1925. This provided vehicle access from Coolum to Yandina. In 1923, the tramline to Coolum was opened and unscheduled passenger services began. Over this time considerable expansion of the sugarcane industry took place. Cane farming provided the main source of financial stability in the distruct until the advent of tourism in the 1960s.