The original Newstead, located on the south bank of the Loddon River, was surveyed in 1847, but was never developed because the site was too swampy. The present day town was established about five kilometres upstream and proclaimed in 1856. In its early years, Newstead was reliant upon gold production, which was variable and gradually tapered off. Agriculture and grazing became important to the local economy. In 1861 the town’s population was around 200, but had risen to over 450 by 1901. The early site is now covered by the Cairn Curran reservoir.