After subdivision of some larger properties the resultant village was officially named Bundanoon in 1881. Bundanoon was the name the first inhabitants, the Gundungurra people, used to describe the deep and spectacular gullies that so typify the landscape surrounding the present day township.
Development followed the construction of the railway line, as the area had supplies of coal, freestone and timber, all necessary for that work. Over the years there were two coal mines established in the Gullies and at least three timber mills sourcing timber from the Gullies also. The sandstone quarry between Bundanoon and Penrose supplied sandstone for many prominent buildings in NSW and is still operating.
Shops and various other businesses began to emerge along both sides of the railway line and Erith Street was once home to various shops. Ellsmore Road was the main road to Sutton Forest. The first licensed hotel, the Commercial, was in Erith Street next to the present hotel (built in 1922). W.A.Nicholas, manufactured his ‘Golden Cross’ brand powders and potions in the building known as “the pill factory” in Anzac Parade. (since used as a guest house then a restaurant/motel).
Guest houses and tearooms became popular as tourists from Sydney used the new railway to holiday in the area described as just as scenic and beautiful as the Blue Mountains. During the peak years for tourism, Bundanoon had approximately 68 guest houses, some large, some just the family home catering for paying guests. Attractions included the scenery at Morton National Park (the gullies), invigorating weather, walking, riding, tennis, golf, and swimming in the Paddy’s River. waned.
Now days, Bundanoon is a happy, rapidly growing country community that has retained its village atmosphere. The feeling of belonging is enhanced by the relaxed and friendly attitudes of its residents.
The Morton National Park, which is literally apart of the township attracts visitors and new residents alike.
Tourism whilst a major industry, with many new attractions such as wineries, open gardens and Bundanoon’s event of the year, ‘Brigadoon', seems to seamlessly blend into the daily routine and never seems intrusive.