The townsite is on the traditional land of the Kalaako people, who are also referred to as the Malba or Malpa, a name given to them by the Wudjari people to the south in reference to their customs, meaning they were circumcised and subincised.[3][4]
Originally selected as a siding on the Norseman to Esperance railway in 1916, Red Lake was gazetted as a townsite in 1922.[5][6] An official 1922 map of the townsite shows the town west of the telegraph line and consisted of the north-south running Stephenson and Duke Streets and the east-west running Taylor Street, with 32 blocks of land allocated along them.[7]
The Red Lake Townsite Nature Reserve, gazetted on 14 March 1969 with a size of 0.76 square kilometres (0.29 sq mi), now occupies the western part of the townsite. It is located in the Mallee bioregion.[2][8]