Dullstroom was founded in 1880 and was later proclaimed as a town by then State President of the South African Republic, Paul Kruger, on October 9, 1893.   The town derives its unique name by its namesake Dutch settler, Wolterus Dull – a merchant from Amsterdam and chairman of a committee which rendered assistance to families who had suffered losses during the First Anglo-Boer War.
The element stroom, ‘stream’, refers to the Crocodile River nearby. Initially the company purchased the farms Groot Suikerboschkop and Elandslaagte as the nucleus of the settlement, which included housing for the settlers.

While many of the men in the settlement joined the rebels in the Second Boer War, the women and children were held in the British concentration camp in Belfast. After the Battle of Bergendal, guerrilla fighting continued in the area for a while.  During the war, various assaults on the town took place in 1895, 1896, 1900 and 1901. During these assaults, the town was almost completely destroyed and most of the settlers returned to the Netherlands. A stone memorial and remembrance garden in the town centre is a reminder of this fraught time.

Post war some of the immigrants returned to rebuild the village, by 1920 eight stores had been established, and by 1921, Dullstroom was granted the title of a Town Council.

The trout industry came about in 1912, when J Gurr the postmaster from Lydenburg, surprisingly caught a fish that resembled a trout in the Dorps River. From this find, trout fingerlings were released in a few local streams from hatcheries from the Cape. By 1927 the fish were doing well and trout boxes were built at the old municipal dam, allowing the streams to be stocked with trout.

In 1965, a new municipal dam was built and stocked with 17,000 trout fingerlings. These hatchlings were the forerunners of the present day trout industry that the town and surrounding area is so well known for.