Israelite Bay was named by the Dempster Brothers in 1863 after they became aware of the fact that it was the southern end of the boundary between two aboriginal tribes. The aborigines to the west circumcised the youths whereas those to the east did not.
A telegraph station was established here in 1877 as part of the East West telegraph line. The station was abandoned in 1917 and the building was purchased privately in 1927, later to be vested in the National Trust. The original building was constructed of timber and was replaced by a stone building in 1896. The complex includes the ruins of a cottage built in 1884 and two graveyards where telegraph operators and others who lived in the area are buried.
The Glencoe Station Homestead was originally the home of John Brook, the first linesman at Israelite Bay.