The townsite of Esperance, located on the central south coast of the state, derives its name from the bay on which it is located. Esperance Bay was given this name by Admiral Bruny D'Entrecasteaux, commander of the French expedition which explored this coast in 1792. The name honours the ship "L'Esperance" commanded by Captain Huon de Kermadec, which anchored here on 9 December 1792. The bay provided safe anchorage while repairs were made to the "L'Esperance". The name of the other ship in D'Entrecasteaux's expedition, "L'Recherche", is preserved by the naming of the adjacent islands as the Archipelago of the Recherche.
The area of the Esperance townsite was first settled by the Dempster family in the 1870's, and in 1876 a telegraph station was opened here. The formal gazettal of the townsite did not occur until 1893.