The area of Narellan was home to the Illawarra based Tharawal People, who shared the land with the Darug People of Western Sydney and the Southern Highland based Gandangara people. In 1810 Governor Macquarie made numerous land grants. William Hovell’s 1816 grant of700 acres is of particular significance as its name “Narelling” is what the area is named.
The township was established in 1827 after much indecision from authorities. The township was located on the Great South Road (now Camden Valley Way and Razorback Road) and saw success as a trading area for those passing through on the between Sydney and Melbourne.
By 1829 a lockup had been built and numerous inns and unlicensed hotels opened near the town and proved quite successful as the nearest completion was located in Liverpool 21Km away. The growth of the area saw many of the unlicensed hotels being refashioned into licensed establishments.
In 1830 the benches of Magistrates were issuing licences through the colony and Thomas Avery was granted the first licence for the Travellers Rest (1830-1832). A school was established in 1839 overseen by Rev. Robert Forrest and was also used for church services. A government school was established in 1875 and Construction of St Thomas’s Church of England began in 1875 but the church was not consecrated until 1884.
The first village allotments where offered for sale in 1843 for £20. A post office opened in 1856. A rail line from Camden to Campbelltown and Narellan station was established in 1882. Narellan had a slow development and in 1941 coal handling facilities where relocated from Camden and coal screening and loading bins were constructed opposite the station. These facilities handled the coal brought by road from Burragorang Valley mines. During World War 2 defence establishments included an Army Camp and the Eastern Command Training School at Studley Park.
A brick works opened in 1949 but Narellan remained a quite village up until the 1950s and 1960s with only a general store, hotel and butcher shop.