The name probably originates from the Little Para River whose headwaters are in the area. It was settled in 1840-41 by John Barton Hack and John Richardson, and was a sheep station until the beginning of the 20th century. It was subdivided and, with an influx of smaller landholders, a school, post office, church and recreation hall were built, but the town did not grow much beyond this.
In 1966, work started on the Kangaroo Creek Reservoir, a dam of the River Torrens, and in 1969 it was completed at a cost of $5.3 million. Apart from supplying water to eastern Adelaide, it also serves a flood protection role and holds 19,160 megalitres.