The town was originally established by the State Electricity Commission of Victoria to house construction workers from the Kiewa Hydroelectric Scheme in 1949, passing to the control of the local shire council in 1967 after construction was completed.
Post Offices opened at Tawonga South (to the north) on 15 April 1943 and at Mount Beauty on 17 February 1947. Post Offices known as No 2 Camp, No 4 Camp, and No 5 Camp, Mount Beauty were open in the 1949-1953 period.
A hang gliding competition, the Bogong Cup, is held in January each year.
Mount Beauty is a launching point for trips to the ski resort, Falls Creek and to the Bogong High Plains. To this end there are several ski hire shops, several eateries and a bus company doing daily trips to and from the end of the road at Falls Creek.
This town also has great views to the mountains, such as Mount Bogong and the peaks that are of interest to so many tourists coming through the town.