The area was the home of the Djadja Wurrung Aborigines. Farmers began to move into the district in 1838. In 1848, Irish immigrant John Egan took up land on the future town site then known as Wombat Flat. He and a party of searchers found gold in 1851 on land now covered by Lake Daylesford. This started a local gold rush. More gold was found around the area. The town site was surveyed and founded in 1852. At first the town was called Wombat, and later renamed Daylesford.