Walloon, a rural/residential town, is nine km west of central Ipswich. It was one of the original stations on the Ipswich to Grandchester railway (1865), and when the line began operation the small settlement opened a private (Catholic) school which enrolled 41 children.

In 1877 poor quality coal was found in Guilfoyle Gully, a kilometre north of the Walloon railway station, an event coinciding with the opening of the Walloon Hotel and a government school. Better coal was found 100 metres east of the gully in 1881, and a tramway was constructed to convey the coal to the station. Later in the 1880s a larger deposit, the Caledonian colliery, was opened about three km west of Walloon, and mining continued until 1960.

In addition to coal there was mixed farming and dairying, and along with other towns such as Marburg and Purga, Walloon had a small butter factory. The township, however, was overshadowed commercially by Rosewood and West Ipswich, and Pugh's Queensland Directory (1925) recorded it as having only the hotel, a butcher, a fuel merchant and a tanner. The old school, however, was replaced in 1935 and became a CWA hall.

In the 1980s Walloon changed to a rural/residential outer suburb of Ipswich, and in 1993 an electric train service was started for quicker commuting.

In March 1891 two school children, sisters Bridget and Mary Broderick, drowned in a local waterhole. The tragedy became the subject of a poem by Henry Lawson, The babies of Walloon, 1891. A bronze sculpture of the two girls stands in the Henry Lawson Bicentennial Park at Walloon. Part of the sculpture was removed in 2012 by vandals.

Walloon has local shops, a primary school, Catholic and Uniting churches, a community hall and a hotel. Its census populations have been:

Census DatePopulation
189153
1911267
1947146
1966148
19961092
20061532
20111548

For a short time Walloon Shire was the local government authority for the district. It was amalgamated with several others to form Moreton Shire in 1917, and had a census population of 4295 in 1911.