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The townsite of North Dandalup is located in the south west, 71 km south of Perth and 16 km north east of Pinjarra. It is located adjacent to the North Dandalup River, from which it derives its name. Dandalup is an Aboriginal name, having been shown on maps of the area since 1835. The meaning of the name is not known.

The townsite is situated on the South Western Railway, and North Dandalup was included as a stopping place in timetables of 1894. Land around the siding was privately owned and subdivided, but a schoolsite was set aside in 1899, and a hall and recreation ground in 1915. In 1932 the North Dandalup Prescribed Area was declared, and then in 1972 the area was gazetted a townsite.