Queenstown was named after the Queen River, a tributary of the nearby King River.

It was first surveyed in 1895 as a proposed dormitory town for the Mt Lyell copper mine and smelters. In 1901 it was officially the third largest town in Tasmania and was home to the Mt Lyell Mining and Railway Company, which had been earlier established as an entity in 1881.

The establishment of Queenstown in 1896 saw the construction of a hotel and a general store. Three years later a railway from Strahan, located on the coast 41 kilometres away, was completed and in 1901 the Empire Hotel, which still stands, was completed. It was a suitable symbol of the town's increased prosperity.

It was American metallurgist, Robert Sticht, who had perfected the ‘pyretic smelting’ process which resulted in the denuding of the surrounding countryside’s vegetation.

In the 1900s, Queenstown was the centre of the Mount Lyell mining district and had numerous smelting works, brickworks, and sawmills. The area at the time was finely wooded. The population in 1900 was 5051.

The ABT railway, also known as The Westcoast Wilderness Railway, is a 35 kilometre long railway operating on a rack and pinion form of propulsion which allows it to climb 200 metres almost vertically in parts, which runs from Queenstown to Strahan. The railway uses the fully restored 100 year old steam locomotive that ran on the original rail line built for the Mt Lyell Mining & Railway Company.

Today, the town and district attracts significant numbers of tourists, on either organised tours or the hire car 'circuit' around Tasmania. Some features continue to fascinate tourists, either the denuded mountains, the slag heap or the gravel football ground where “real men” play football on the rocky ground.

There are significant opportunities to catch glimpses of the town’s past at the local museum, and simply by driving up Orr Street, the old main street, now with closed pubs and the dominant Post Office tower.

Mt Lyell Mines continued to operate the mine until 1972 when they were taken over by the Renison Gold Company. In 1995 the mine became part of Copper Mines of Tasmania (CMT - Mt Lyell). It still operates today but its viability is always in danger from fluctuating prices on the world copper market.

In recent times there has been an argument about the reforestation of the hills around Queenstown. Some locals, quite correctly, have claimed that the denuded hills are a tourist attraction. Others have felt that the rainforest which characterises the area should be encouraged to re-grow.

The Lake Margaret power station, Australia's second oldest working hydro-electricity station (the one at Moorina is older), lies north of Queenstown in the Yolande River Valley. It was completed in 1914 and still contains machinery from that period.

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