Prior to the establishment of Melbourne, the area was inhabited by the Wurundjeri peoples. In the 1840s European settlers named it the Parish of Boroondara — meaning “a place of shade” in the Woiwurrung language. In 1838 Dight travelled down the Yarra from Heidelberg and decided to locate his water-powered mill on a site adjacent to the falls. The impressive 3 story Mill opened in 1840.

In 1856 a site was reserved for a mental asylum next to the river. By 1871 Kew Lunatic Asylum, now known as Willsmere Estate, was completed. The Kew Cottages for children were added in 1887. The hospital was built despite objections by residents and the Kew Borough Council. Kew Cottages and Willsmere Hospital are listed on the Victorian Heritage Register.