The Treasury Department had its origins in the appointments of an Acting Treasurer in 1829 and a Colonial Treasurer in 1832, the latter heading the Colonial Treasurer's Department until 1890. With the advent of responsible government in that year, the above titles were changed to Under Treasurer and Treasury Department respectively.

The principal role of the Treasury Department was to advise the Government on financial and economic matters including state government taxation and borrowings.

In 1970, the State Taxation Department was established to manage the State's taxes and in 1986 the Western Australian Treasury Corporation was established to co-ordinate the State's borrowing activities.

The Taxation Department consolidated all forms of State taxation in one agency. These included property valuations, stamp and probate duty. About two thirds of the Department's employees were transferred from Treasury to Taxation Department. Previously, Western Australia had been the only State which had its taxes collected by the Commonwealth.