For many decades most of Bullaburra was a well-kept secret on the Great Western Highway, hidden in bushland and recognised only by a sign declaring the "Blue Skies Village".

An original land owner was Sir Henry Parkes then NSW Premier in 1870, who had acquired a large land holding on the south side of Bullaburra. A Californian man by the name of Jose Hay, acquired a large parcel of land from what is now known as San Jose Avenue to Bullaburra, on the north side of the Great Western Highway.

Arthur Rickard purchased both Parke's and Hay's land in 1924 and with enthusiastic support from the then Blue Mountains Shire Council, a new subdivison of Bullaburra was named. Bullaburra is said to be an Aboriginal word meaning "blue skies" or "clear skies", although from which Aboriginal language is not known.

Arthur Rickard paid in 1924 to have a railway station built, before the village was even established. The south side of Bullaburra eventually developed at a faster rate than the north side, and with still no connecting roads from north to south, many locals of Bullaburra never get to meet their fellow residents.