Day Dawn was home to over 3,000 goldminers and their families in the early 1900s. Its rapid growth and prosperity was due largely to the Great Fingall mine, once one of the richest and most profitable gold-mining operations in Australia. The success of the Great Fingall was closely associated with Herbert Hoover. Hoover is primarily credited with making them profitable for tens of thousands of shareholders worldwide.
The area has a semi-arid climate with hot summers and mild to cool winters, but is prone to the occasional inundation, in 1925 several buildings in the town collapsed following heavy rain and flood waters. The town received 1.56 inches (40 mm) of rain over the course of two days.
Gold was discovered here by Ted Hefferman in 1892, and he named his discovery "Day Dawn", after the time of day that he pegged his claim. Originally the settlement was informally called Four Mile, that being its distance from the town of Cue. It was gazetted as Bundawadra in 1894, but was changed to Day Dawn within three months.
The Northern Railway arrived at Cue from Mullewa, a distance of 317 kilometres, in 1894. In 1895 the Day Dawn Associated Gold mine, Kinsella, Trenton and the Day Dawn South mine were all operating ten head stamp mills close to the town for processing ore.
An important strike was staged there for nine weeks in 1899 when local miners protested against the use of Italian immigrant contract workers and Great Fingall's attempt to reduce miners' wages by five shillings per week.