Freshwater is in the traditional lands of the Yidiny people. European occupation along the banks of the Barron River began in late 1876 when the Douglas Track and Smith's Track were established around Lumley Hill and Mount Whitfield, linking the new port of Cairns to the Hodgkinson goldfields. Chinese market gardeners moved into the area in the late 1870s, after exhausting their chances on the Hodgkinson Goldfields, leased small plots from the landowners, successfully growing rice, bananas, pineapples and other tropical crops. The need for a railway from the Herberton mines to the coast, resulted in the construction between Herberton and Cairns. The first 8 miles of this railway went from Cairns to Redlynchcrossing over Freshwaster Creek. The development of the railway line encouraged land developers to release a land subdivision called Richmond Park Estate near the railway line and Freshwater Creek, which was sold from 1886 with advertising featuring the forthcoming "Richmond Park railway station" and its ten-minute rail journey to Cairns. When the railway line opened in late 1887, there were a number of railway sidings along the line: Stratford, Lily Bank, and Richmond. Richmond Siding was renamed Freshwater Siding in January 1890. A rice mill was established on the Lower Freshwater Creek and was being successfully operated by local man, Joseph Kipling in 1891. Chinese farmers grew rice in the adjacent fields. The Freshwater State School was opened on 20 August 1896. Freshwater Post Office opened by April 1925. At the 2006 census, Freshwater had a population of 1,976. In the 2011 census, Freshwater had a population of 2,104 people.
Bunny Adair Park on Lower Freshwater Road is named after Bunny Adair. The park has equestrian facilities and is home to the Freshwater Pony Club. The Freshwater branch of the Queensland Country Women's Association meets at the CWA Hall on the corner of Kamerunga Road and Old Smithfield Road. The branch was established in 1937 and held its meetings in the home of first president Mrs Odgen. In 1940, the railway square became available for recreational use and the CWA purchased the present site for their hall. However, it was not until after World War II that the branch focussed on raising funds for the building, having devoted their wartime activities to the manufacture of camouflage nets and contributions to the war effort. The building was completed in 1955. In additional to CWA activities, the hall is used for by other community groups and for private parties.
Education
Freshwater State School is a government primary school for boys and girls at 10 Corkill Street. In 2017, the school had an enrolment of 738 students with 50 teachers and 25 non-teaching staff.
In 2009 for the Q150 commemorations, the Stratford and Freshwater Community Association built a heritage trail, with 22 signposted sites in Freshwater and 29 signposted sites in the neighbouring suburb of Stratford.