Like so many of the towns on the Derwent River it was explored soon after the establishment of the settlement at Hobart Town. However settlers did not move into the area until the 1820s. Ouse is encounted when traveling the Hobart to Queenstown (or vice versa) route.
There seems to have been some confusion over the town's name in the mid nineteenth century. In the 1840s it was known as Ousebridge which by the 1850s had become Ouse Bridge. By the 1860s it had been reduced to Ouse.
One of the first buildings in the town was the Anglican Church of St. John the Baptist. In the 1830s when St Peter's Church was being built people began to settle around the present site of Ouse. Although there was only 16 km between the two settlements the Anglican Church decided that the journey. The church was consecrated in 1867 and, today, it is notable for its impressive stained glass windows and its interesting memorials to the early settlers in the district. The Catholic is quite historic also.
The town's brief brush with literary fame occurred in the 1820s and 1830s when David Burn, Australia's first playwright, lived in a country house named Rotherwood near Ouse. His play The Bushrangers was performed in Edinburgh in 1829 and in 1842.