The name Murtoa is believed to come from a local Aboriginal word meaning "home of the lizard". Murtoa Post Office opened on 1 August 1874.
Because wheat could not be exported during the Second World War, the Stick Grain Shed, 260m long and 60m wide, was built from 640 unmilled tree trunks in 1941. The present day Murtoa silos can hold up to 400,000 tonnes of grain.
The town has an Australian Rules football team competing in the Wimmera Football League.