Medium sized service centre in the heart of the Western District.

Casterton is a relatively small rural centre of about 2000 people located on the banks of the Glenelg River in a valley surrounded by rolling hills. Situated 352 km west of Melbourne and 63 km west of Hamilton on the Glenelg Highway, it is a service centre to a large pastoral, mixed farming, timber-producing and dairying district near the South Australian border. Casterton has a golf course, a racecourse, a caravan park, a sports and leisure centre and there are numerous sporting facilities in Island Park, off Murray St. There are a number of scenic attractions in the area.
The Kanalgundidj clan (part of the Jardwadjali language group) are thought to have occupied this area prior to white settlement. The first Europeans in the area were the party of surveyor Thomas Mitchell which passed through the area during the Australia Felix expedition of 1836. Mitchell wrote quite extensively of an Aboriginal woman and her child whom he met nearby, bestowing upon her the gift of a tomahawk. He then headed south and encountered the Henty brothers at Portland. His reports of good pasturage encouraged them to move inland in 1837, marking the start of European settlement in the Western district. They took up 28 000 ha of land in the area and an original homestead, 'Muntham', still stands between Casterton and Coleraine.
As was the case throughout Australia, the indigenous people lost access to their lands as a result of white settlement and so occasionally fed upon the sheep which gradually displaced their traditional food sources. In retaliation for what whites saw as 'theft' a massacre of Aborigines occurred at a camping and corroboree site now known as Murdering Flat. They were allegedly shot with bolts, nails and gravel loaded into a cannon. Protector of Aborigines, George Robinson, remarked that the majority of stories about Aboriginal depredations in the area were "grossly fallacious or shamelessly exaggerated". By 1857 James Bonwick observed that "The tribe is nearly extinct" and he reflected upon the degree to which alcoholism had spread through the community as the traditional culture collapsed.
The townsite of Casterton emerged on a crossing place along the Glenelg River. Surveyed in 1840 it was named after a settlement in the north of England. The word 'casteron' is said to derive from a Roman word meaning 'walled city'. This may be coincidental although some sources suggest it is an intentional reference to the way in which the Australian settlement is 'protectively' surrounded by a series of hills.
The Glenelg Inn was established in 1846 and a post office was opened the following year. The following decade saw a range of businesses opening and a racing club was formed. The telegraph arrived in the 1860s and the 1870s saw the establishment of local newspaper the Casterton News.
By 1880 the large squatting runs were being broken up for closer settlement by selectors. The railway arrived in 1884 and Casterton became the western terminus of the state's rail service. A kangaroo skin tannery was established in 1885 and a cheese factory in 1892. That same year the premier of Victoria, William Shiels (after whom part of the main thoroughfare is named), his ministry and about 40 journalists travelled to Casterton by a special train to present his policies in a media event which amounted to the first rural policy launch.
Wheat production declined in the 1890s owing to soil erosion but the dairying and meat industries took up the economic slack. By that time the town had five hotels, five butchers, eleven general storekeepers, two tinsmiths, seven blacksmiths and wheelwrights, three banks, four tailors, three drapers and milliners, six auctioneers and agents and a chemist.
On returning from South America and the 'New Australia' venture in 1902, poet and political radical Dame Mary Gilmore settled on a property at Strathdownie, to the south-west of Casterton. She came to public attention when her life and work were featured in the Bulletin in 1903. She then moved to Casterton in 1907 where her son attended school. There she began a long-standing association with the Australian Worker for whom she regularly contributed a special page for women. She befriended and campaigned for radical poet and Labor member J.K. McDougall and wrote her own poetry. Her first volume of verse was published in 1910. Dame Mary left Casterton in 1912.
Another poet, Adam Lindsay Gordon, also participated in horse races at Casterton. The infamous 19th century literary figure and swindler, George Henry Cochrane (aka 'Grant Hervey' and 'Hervey G. Madison'), was born at Casterton and lived in the town at the same time as Gilmore. Before World War I he moved to Sydney where he became a contributor to the Bulletin. In 1914 Cochrane returned to the town where he managed to perpetrate fraud upon the Casterton News. He was caught and, as some accounts report it, he was tarred and feathered. Certainly he was charged with forgery and uttering and was jailed. After his release he moved on to Mildura where he definitely was tarred and feathered and run out of town.
The Casterton Christmas Carnival sees the townsfolk go all out each December in terms of decorating the town with Christmas lighting. The annual show is held on the second Saturday in November. The Casterton Kelpie Muster attracts people to the town which is known as the Birthplace of the Kelpie.