The type specimen was collected by Ken Newbey from Bluff Knoll in the Stirling Range on 14 January 1966. Western Australian State botanist Charles Austin Gardner coined the name Dryandra montana but did not publish it. The species was first formally described as D. montana in 1996 by Alex George in the journal Nuytsia. In 2007, Austin Mast and Kevin Thiele transferred all the dryandras to the genus Banksia and this species became Banksia montana. The specific epithet (montana) is from the Latin word montanus meaning pertaining to mountains referring to the habitat of this banksia.