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Wyalkatchem townsite is located in the central agricultural region, 192 kilometres east northeast of Perth and 35 kilometres east of Dowerin. When the extension of the railway east from Dowerin was planned in 1908 land was set aside for a future townsite in the area of Wyalcatchem Tank. The route of the railway and site for a station was not fixed until 1910, and action followed to then fix the position of the townsite and survey town lots. Following the survey of the lots the townsite was gazetted spelt Wyalkatchem in 1911.

Wyalkatchem is an Aboriginal name first recorded for a waterhole spelt Walkatching in the 1870's. The spelling Walcatching was used in 1881 when the Toodyay Road Board referred to a tank to be built there, and when the road from Northam to the Yilgarn Goldfield was surveyed in 1892 the spelling Wyalcatchem was used for the tank. The Walkatching spelling is probably the most accurate, as Aboriginal names in this region rarely end in em. The change of spelling from Wyalcatchem to Wyalkatchem in 1911 was done by the Department of Lands & Surveys according to rules the Department had adopted for spelling Aboriginal names. (the letter K should always be used for the hard c). The meaning of the name is not known.