The name Mooloolaba is thought to have derived from either the Aboriginal word 'mulu' for snapper fish or from 'mullu' meaning red-bellied black snake.
Lieutenant Heath surveyed and chartered the Mooloolah River mouth and harbour in 1861. The following year, Tome Petrie, explored the region for timber resources. By 1864, the first land was purchased at the mouth of the Mooloolah River by William Pettigrew. Pettigrew dominated the timber trade in the Maroochy District for the next thirty years. He founded a timber depot and wharf to ship timber from Cotton Tree and Buderim to his Brsibane sawmill. In partnership with James Low, he also opened the first store in the district to serve the needs of the new settlers.
Mooloolah Heads was the gateway to the Maroochy District between 1870 to 1884. Due to the protection Point Cartwright offered, the port was preferred over the Maroochy River. Pettigrew's steamers 'Tarshaw,' 'Tadorna Radjah' and 'Gneering' operated along both rivers. The steamers carried produce, passengers and timber between Mooloolaba and Brisbane. In 1891, with the opening of the North Coast Railway to Yandina river transport deteriorated. Pettigrew transferred his activities to Maroochydore, establishing a sawmill there in 1891, led to the further declination of the depot at Mooloolah Heads. Over the next decade little development occured in the coastal areas.
By the year 1919, Mooloolah Heads industry had grown to include fishing and fruit growing. Thomas O'Connor bought Pettigrew's land from Sylvester Murphy and surveyed the first allotments of what to become Mooloolaba. On January 1 1921 the first sale of allotments was held. These extended along the river frontage from the surf beach to Tucker Creek.
It was then that the name Mooloolaba was embraced to distinguish between this developing area and the Mooloolah township on the railway.
Throughout the 1920s the population increased. The area had always been a desirable destination for Buderim settlers. Holiday cottages and houses were dotted along the river and the narrow spit. Boat hire and fishing were also very popular. As the roads and public amenities improved, Mooloolaba continued to develop as both a premier residential and holiday location.