The town was named after Hazelbrook House, built in the 1870s by Svonte Noles and owned by Edward Higgs. The name Hazelbrook was adopted in 1884 when the Hazelbrook railway station was opened opposite the home. Hazelbrook House no longer exists but Selwood House is a heritage-listed building in the nearby vicinity and now houses a veterinary practice.

The town soon became a very popular tourist destination thanks to many lovely waterfalls close by and many visitors would stay in boarding houses, hostels and hotels such as Woodlands House. Alas, an economic depression struck Sydney and the tourist wave passed. These days Hazelbrook has become a residential village with more than 4500 residents.

Hazelbrook has a wonderful local village shopping centre which has everything ranging from Butcher, baker, coffee shops, local supermarket, hairdressers and a barber.

Gloria Park is the main recreational area which was built during the great depression as an unemployment relief project, using shovels and pickaxes after the Council purchased the land in the early 1930's.

Hazelbrook has one of the highest concentrations of indigenous artworks in the Blue Mountains. Many caves with stencilled handprints and ochre paintings are found throughout the area and near Gloria Park are some deep rock holes called the Aboriginal Wells.

Other attractions in the area include Terrace Falls, Victor Falls and Bedford Pool on the south side of the village, plus Lyre Bird Glen, Oaklands Falls, Horseshoe Falls and Burgess Falls on the north side.