Koolyanobbing is located 54 km NNE of the town of Southern Cross, Western Australia. Iron ore is mined here by a subsidiary of Cliffs Natural Resources of Cleveland, Ohio. Ore is railed to port at Esperance for export. The current operations commenced in 1993.
The first European to visit the area was Charles Cooke Hunt in 1864 who explored the Koolyanobbing range that is situated nearby.
The next European to visit the area, in 1887 and later in 1891, was a gold prospector named Henry Dowd, who thought that the rocks in the area were of no value. He recorded his findings and stored them in a bottle that was buried next to a survey peg and which was found again in 1963 at what is now known as Dowd Hill.
The town was established to service a new iron ore mine in the 1960s at Dowd Hill. The town was gazetted in 1965. The former Eastern Goldfields railway between Southern Cross and Kalgoorlie was realigned for change to standard gauge, and to service the Koolyanobbing mine
The name is of local Aboriginal origin, meaning "place of large rocks". Dampier Mining Co Ltd, a subsidiary of the Broken Hill Proprietary Company Limited (BHP), mined iron ore between 1967 and 1983. Ore was shipped by rail to Kwinana, near Perth, to supply Australian Iron and Steel's (also BHP) blast furnace. The closure of the Kwinana blast furnace in 1982 resulted in suspension of iron ore mining at Koolyanobbing until 1993.
WA Salt Supply produces salt at Lake Deborah, 20 km to the north, which is railed from Koolyanobbing to Kwinana.