Prior to European settlement the area around Yungaburra was inhabited by about sixteen different indigenous groups, with the custodians being Yidinji People and neighbouring Ngadjoni people. In the early 1880s the area around Allumbah Pocket was used as an overnight stop for miners travelling west from the coast. In 1886 the land was surveyed, and in 1891 settlers moved in.
In 1910 the railway arrived, and the town was renamed Yungaburra, to avoid confusion with another town called Allumbah. By 1911 indigenous numbers had fallen to 20% of the pre-settlement population due to disease, conflict with settlers and loss of habitat.
In 2006, The Atherton Tableland region was devastated by the Category 4 (on the Australian scale) Cyclone Larry. The roofs of the community hall, police station and one of the bush cottages were badly damaged or removed by the weather, as was the front of the Yungaburra Butchery and the sign on the Gem Gallery. As well as the above, many trees, sheds, caravans and gardens were blown away or ruined.