Pambula is quite an old town with a very rich heritage. Pambula was a town and community long before the beaches became a tourism magnet. Pambula precedes Merimbula by many decades. Pambula appreciates and is preserving the old stuff. The town is clearly benefiting from this approach.
The name Pambula is derived from its Dharwa name, pronounced "panboola", meaning 'twin waters' in 1797; the European voyager George Bass explored the area.
Pambula is a historic village with its first European settlers thought to have been the Imlay brothers who established cattle runs on the Pambula River flats in the 1830s. The village of Pambula situated on the flats near the river was planned in 1843 by surveyor Townsend and the first school and churches were built there, but frequent flooding led to the village being relocated to its present site on higher ground.
In 1888, gold was discovered and villages grew up around the mines at nearby Yowaka River and Pipeclay Creek. This created a boom in the town, but in the early 20th century production of gold ceased and the prosperity of the town went into a decline.
Pambula, until relatively recent times was the dominant town of the district, providing facilities which came to include commercial premises, banks, courthouse, hospital, newspaper, and a school of arts. Agriculture developed on the river flats, producing prize crops of maize and potatoes, and a dairying industry became established. Timber felling was carried out in the surrounding forests, and oyster farming was developed in the river.