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Mount Magnet is a townsite in the Murchison goldfields, 569 kilometres northeast of Perth and 126 kilometres east of Yalgoo. Gold was discovered in the Mount Magnet area in July 1891 by the prospectors George Woodley and Tom Sampey. By late 1893 there was enough interest in the area for the government to consider declaring a townsite, and the survey was carried out in 1894 and the townsite gazetted in 1895. The railway to Mount Magnet was completed in August 1897, but it was not opened until July 1898. The railway closed in May 1978.

Mount Magnet is named after the nearby hill of the same name. The hill was named by the explorer Robert Austin in 1854, in consequence of the magnetic properties of the rocks on its summit. The Aboriginal name of the hill is Warramboo.