The semi-nomadic Kirrae Wuurong clans originally inhabited the area between Mount Emu Creek and the Hopkins River, and much of their language was recorded by a Scottish squatter, James Dawson.

The first dwelling in the township area was built in 1840 by Donald McNicol, and consisted of a slab hut on the east bank of Lake Terang.
The township was developed in the late 1850s, the post office opening on 1 March 1859.

The railway though the town was opened in 1887.
From 1890 it was extended as part of Victoria's south-western line.
The Mortlake line once branched from the town, opened in 1893 and closed in 1978.
The local railway station is served by V/Line passenger services on the Warrnambool line.

The Terang Magistrates' Court closed on 1 January 1983.

Avenues of trees were later planted and several of these are now under the protection of the National Trust.
Other features of Terang include a Heritage Trail walk which points out the historic trees and many of the historic buildings and sights of the town.

Features to see are the historic post office with its clock tower (1903-4), the war memorial, the rose gardens with the band rotunda, and the town's first church (Bible Christian Church c.1863).
The Thomson Memorial church is also a significant local structure.
There is also an 18-hole golf course at the western entrance to the town.
The semi-nomadic Kirrae Wuurong clans originally inhabited the area between Mount Emu Creek and the Hopkins River, and much of their language was recorded by a Scottish squatter, James Dawson.
The first dwelling in the township area was built in 1840 by Donald McNicol, and consisted of a slab hut on the east bank of Lake Terang. The township was developed in the late 1850s, the post office opening on 1 March 1859.
The railway though the town was opened in 1887. From 1890 it was extended as part of Victoria's south-western line. The Mortlake line once branched from the town, opened in 1893 and closed in 1978. The local railway station is served by V/Line passenger services on the Warrnambool line.
The Terang Magistrates' Court closed on 1 January 1983.
Avenues of trees were later planted and several of these are now under the protection of the National Trust. Other features of Terang include a Heritage Trail walk which points out the historic trees and many of the historic buildings and sights of the town.
Features to see are the historic post office with its clock tower (1903-4), the war memorial, the rose gardens with the band rotunda, and the town's first church (Bible Christian Church c.1863). The Thomson Memorial church is also a significant local structure. There is also an 18-hole golf course at the western entrance to the town.
Terang