The Mount Lofty Ranges, which encompass Waterfall Gully, was first sighted by Matthew Flinders in 1802. The gully itself was discovered soon after the establishment of Adelaide, and Colonel William Light, the first Surveyor General of South Australia, was said to have decided on the site for Adelaide when viewing the plains from the hills near Waterfall Gully. Nevertheless, the gully had seen human visitors long before the arrival of the Europeans, as the native population had lived in the area for up to 40,000 years prior to Flinders' appearance off the South Australian coast.