As with many towns that began in the 1800s, Gympie was originally settled as the consequence of a gold rush. In 1867 James Nash was prospecting in the area when he found 2.7kg of gold in six days. Nash's discovery began a gold rush which quickly led to the development of Gympie.

Discovered in Gympie, the famous Curtis Nugget, which weighed 37kg, was the largest ever single nugget found in Queensland. The area was profitable for many years, and although the gold fields peaked in 1903 reef-mining continued until the 1920s.

It is still possible to get a feeling of the town's past just by walking down Mary Street, which is lined with historical buildings.

Gympie is completely surrounded by the Cooloola Coast region, so it is also the turn off point for Rainbow Beach, Tin Can Bay and the Cooloola National Park.