Mount Gambier is the second most populated city in South Australia, with a population of 25,591 as of the 2021 census. The city is located on the slopes of Mount Gambier, a volcano in the south east of the state, about 450 kilometres (280 mi) south-east of the capital Adelaide and just 17 kilometres (11 mi) from the Victorian border. The traditional owners of the area are the Bungandidj (or Buandik) people. Mount Gambier is the most important settlement in the Limestone Coast region and the seat of government for both the City of Mount Gambier and the District Council of Grant.

The city is well known for its geographical features, particularly its volcanic and limestone features, most notably Blue Lake/Waawor/Warwar, and its parks, gardens, caves and sinkholes.

Before British colonisation of South Australia, the Bungandidj (or Buandik/Boandik) people were the original Aboriginal inhabitants of the area. They referred to the peak of the volcanic mountain as 'ereng balam' or 'egree belum', meaning 'home of the eagle hawk', but the mountain itself was called Berrin. A sinkhole in the township was referred to as "thu-ghee".

The peak of the dormant Mount Gambier crater was sighted in 1800 by Lieutenant James Grant from the survey brig, HMS Lady Nelson, and named after Lord James Gambier, Admiral of the Fleet. It was the first place named by the British in what was later to become the colony of South Australia. The peak is marked by Centenary Tower, built in 1901 to commemorate the first sighting by colonists.

In 1839, Stephen Henty, one of the Henty brothers who occupied large landholdings at Portland and Merino, led an overland expedition to explore the Mount Gambier region. He was the first white man to climb the peak and view the blue crater lake.

The Henty brothers subsequently laid claim to Mount Gambier in 1842 and established a sheep station there. Conflict with the local Aboriginal residents quickly ensued that same year with Henty's men shooting a number and burning their corpses. In March 1844, a band of Aboriginal people led by Koort Kirrup took a large number of Henty's sheep. Henty's men pursued and engaged them in a prolonged skirmish which resulted in the colonists having to retreat.

Other British pastoralists and their shepherds in the region were being robbed, speared and murdered by the local Aboriginal population and they proposed to form hunting parties to shoot them indiscriminately. After the Aboriginal population destroyed between 200 and 300 sheep, the Henty brothers were forced to abandon the Mount Gambier property later in 1844 with significant loss of capital.

Evelyn Sturt, the brother of the explorer Charles Sturt soon took up the leasehold, establishing himself at nearby Compton and bringing 500 cattle and 3000 sheep to pasture at Mount Gambier. Sturt claimed he was able to control the Bungandidj people by "a good rifle aimed by a correct eye". In May 1845, seven armed colonists pursued Aboriginal groups after livestock were taken. In late 1845, the first police station at Mount Gambier was formed. In 1846, the South Australian Mounted Police were involved in an affray with the Aboriginal people, shooting one and wounding another two.