The original town of Onslow was gazetted as a townsite on 26 October 1885 and named after Sir Alexander Onslow, the Chief Justice of Western Australia at the time. It supported the nearby stations that had been established along the Ashburton River and the gold mines that had developed in the hinterland.

One of the first recorded stations was Minderoo which was established in 1882. By 1890 all land along the Ashburton River had been taken up, running mainly sheep, but also a few cattle. Today it is predominantly cattle with a few sheep.

In the early settlement days, good pearls were found in Exmouth Gulf and the town became home port to a fleet of pearling luggers. These luggers stayed in local water up until World War II when most were commandeered by the armed forces or destroyed.

The post-war period saw pearling start again, but in a small way. The last lugger was sold in 1965. Today pearling is a small industry with the shells farmed for blister and culture pearls.
By 1925, the port facilities at the mouth of the Ashburton were affected by the silting up of the river causing more and more problems in the loading and unloading of visiting ships.

Surveys proved that there was deep water at Beadon Point and so the town was moved some eighteen kilometres to the east to where it is today.

A jetty of some three-quarters of a kilometre in length was constructed to cater for the State Ship and Blue Funnel Line that plied to Singapore. These ships brought in nearly all provisions, building equipment, timber and general merchandise. Exports included wool, pearl shell and minerals. The jetty had to be rebuilt when it was badly damaged by a cyclone in 1934. The jetty continued to serve Onslow until March 1961 when another cyclone demolished more than 300 metres. State Ships were thus prevented from calling at the jetty and were forced to anchor offshore where they loaded and unloaded via a lighter.

In 1972, a landing was established in Beadon Creek and the jetty fell into disrepair to be destroyed in an Army explosives exercise in 1982.

Onslow was actively involved in World War II with the Navy refueling at the jetty and the town becoming the furthest town south to be bombed by the Japanese. On the night of May 15 1943 a solo plane dropped three bombs on the airstrip with no casualties or damage to aircraft.
The Royal Navy used Onslow as its base between 1952 and 1956 to conduct tests on the nearby Monte Bello Islands culminating in an atomic bomb explosion.