Angus McMillan was one of the first Europeans to enter the area and on behalf of his employer, Lachlan Macalister, claimed a 16,000 acre run known as Dargo Hill in 1839.
Although a minor gold rush was experienced at Dargo in the 1860's, the settlement was established primarily as a resting place and supply town for the miners on their way to the goldfields of Crooked River, Grant and Talbotville.
With local pastoral and agricultural capacity, complemented with timber milling, Dargo was the only settlement in the area to survive the decline of gold in the region.