Melrose is the oldest town in the Flinders Ranges. It is in the shadow of Mount Remarkable, The first European explorer in the area was Edward John Eyre in 1840, closely followed by settlers coming to farm the area. Copper was discovered and mining started in 1846, but it was not economic, and ceased in 1851. The mine was opened again three more times; the latest closure was in 1917.
For several years Melrose remained the only established town in the northern Flinders Ranges, supplying remote pastoral stations, mining camps, surveyors, travelers and settlers with police protection, goods and services and a means of communication. By the end of the 1850s a nucleus of business houses had been established.
When it was opened in 1848, the police station in Melrose was the base of the largest police district in the world. A constable, two troopers and an Aboriginal tracker were responsible for an area extending to the Timor Sea.