"Kununurra" comes from the Aboriginal language of the region and means "big waters". Lake Argyle, Australia's largest lake, over 100 sq/km in size, is only 72 kilometres from the town. The town is relatively new and was gazetted in the late 1950s, at the time that the Ord River Irrigation scheme was set up.
The scheme involved damming the Ord River and building a diversion dam 50km downstream so that the waters can be directed to irrigate about 75 000 hectares of land. By 1966 there were 31 farms on the Ord River plains. By 1972 the second stage of the scheme was completed with the opening of the Lake Argyle Dam.