Lyonville is a rural village 5 km north-west of Trentham and 80 km north-west of Melbourne. It is in the Wombat Forest and near the headwaters of the Loddon River on the inland side of the Dividing Range.
Lyonville had extensive forest resources for sawmilling and rich soil for agriculture. The area attracted small farmers, timber splitters and a sawmill proprietor, James Lyon, in the 1860s. In 1877 Lyon organised the opening of a school for the children of settlers and mill hands. Its early name was Lyon's Steam Sawmills school. In 1880 the railway was opened connecting Lyonville to Daylesford and Woodend. Within a few years the township around the station had a mechanics' institute, two stores, three hotels, two churches and the school.
The Lyon mill was transferred to the Trewhella brothers in 1887, who later established a large engineering works in Trentham. Lyonville was described in 1903 in the Australian handbook:
Although much of the millable timber was cut out by the end of the 1890s, the Frith sawmill moved there from Bullarto in 1946. Lyonville has a store, the Radio Springs hotel, a public hall, and mineral springs about 2 km north of the village. The school closed in 1968.
Lyonville's census populations have been:
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Norm Houghton, Tinmber and gold: a history of the sawmills and tramways of the Wombat Forest, 1855-1940, Light Railway Research Society of Australia, 1980