On the arrival of the railway it served as a rail gateway for the Mitta and Upper Murray valleys (the Upper Murray only until the railway was extended to Cudgewa). A considerable amount of gold and tin mining occurred in the late 19th and early 20th century, though, unlike Beechworth, little evidence for this remains. While initially profitable, the mining generally ended because the deeper reefs contained not only gold but other metals, and mining technology at the time was not advanced enough to cope with these and extract the gold profitably.
Since that time, Tallangatta has been a service centre for the local farming community, with a butter factory operating throughout much of the 20th century. Improved road transport links finally ended both the dairy and the rail link in the 1970s (with dairy processing operations now concentrated in Tangambalanga, about 15 kilometres to the west).
Perhaps the most distinctive aspect of the town's history is the fact that it was moved eight kilometres to the west in the 1950s to allow for the expansion of Lake Hume. On 14 April 1955 the Post Office was renamed Tallangatta East and a new Tallangatta office opened at the new town location.
Services include a small hospital , and two primary schools and a secondary school. A considerable number of residents now commute to work in Albury-Wodonga, for these people, the beauty and recreation offered by the lake compensates for the half-hour drive to the larger centre.