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Situated about 15 kilometres west southwest of Busselton, this townsite was declared as Carbunup in 1926. It is named after the nearby river of this name, and the name was changed to Carbunup River in 1958. to avoid confusion with Carbarup, a townsite in the Mount Barker region Carbunup is an Aboriginal place name that has been variously said to mean "place of a kindly stream" , "place of cormorants" (WA Museum which gives the word for cormorant as carbanga), and "place of the stinkwood thicket".
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