Andrew Petrie during his 1842 exploration of the coast gave the name Maroochydore to the area. It was derived from the word "murukutchi-dha" in the language of the Brisbane River Aboriginal people who accompanied Petrie on his exploration. It literally means "the place of the red bills" that is the black swans.
Governor Gipps, stimulated by Petrie's exploration, proposed the Bunya Proclamation of 1842. This prevented settlement or the granting of cattle or timber licenses in the Bunya Country which covered much of the Maroochy district. The Proclamation lapsed, attracting Tom Petrie to explore the coastal area for timber resources in 1862.
Due to the perilous nature of the Maroochy River bar it proved too hazardous for shipping. In 1864, Brisbane sawmill owner, William Pettigrew, established a depot and wharf at Mooloolaba (nee Mooloolah Heads).
Twenty years on, in 1884, Pettigrew transferred his activities to Maroochydore. The area appears to have been mainly used for grazing cattle and has a landing place for timber rafted down the River. That same year, Pettigrew built the first house at Maroochydore. The house was occupied by an employee, Hamilton Muirhead. Pettigrew opened a sawmill on the riverbank in 1891, it was at this time a post office was opened too. Pettigrew continued to run his steamers "Tadorna Radja" and "Tarshaw" in the Maroochy River. The "Gneering" which had also serviced the river had been wrecked on the Maroochy River bar. The steamer was towed to Goat Island and left there as a wreck.
In 1898, Pettigrew closed his mill and went into voluntary liquidation. The mill was reopened and operated by James Campbell & Sons until 1903. The town of Maroochydore still did not exist throughout this time, however, for several years hinterland residents had visited the area for holidays and fishing trips.
Thomas O'Connor, a surveyor, purchased all of Pettigrew's land in the Marrochydore area in 1903. The land was subdivided and portioned into allotments. The first land sale was held in July 1908. This marked the beginning of the development of Maroochydore as a seaside resort.
Maroochydore as we know today began to emerge in 1912. This emergence began with opening of the first Coastal hotel and a regular mail boat service to Yandina. Following this, in 1917, a boat and tram service operated to Nambour. By 1920, the permanent population reached seventy and during the following decade it had grown enough to necessitate schools, churches, business houses, a post office and a bitumen main road.