A property "Coleman" was first settled there by a Mr J. Atkinson in 1848. The town was surveyed prior to the coming of the railway and the railway station opened in 1881.
Cowabbie Post Office opened on 1 May 1881 and was renamed Ganmain on 1 July and Coolamon on 1 November of that year.
Firstly called Cowabbie Road, the station name was very shortly after changed to Coleman and finally the name Coolamon was settled on in 1895. The coming of the railway allowed greater ease in transporting the area's products to distant markets.
The town's broad main street, which has been restored, retains much of its old world charm with its wrought-iron verandahs and awnings. Various bric-a-brac and antique shops and a modern bakery decorated in a country style invite passing tourists to explore the town.