In 1874, when the area came under farm-selection activity, a township was surveyed and named Undera. It is thought that the name is derived from an Aboriginal word, most likely meaning fat. Before being named Undera, the area was known as Mundoona. A school was opened in 1876, and Catholic and Presbyterian churches were opened the following year.
The Undera district extends northwards to Undera North and a westerly bend of the Goulburn River. Whilst the township is in the Goulburn Valley irrigation area, the northern parts sustained a local timber industry until the 1940s, and are mixed grazing and agricultural.
Undera has a school (21 pupils, 1998), a church, a memorial hall, (1928), a large reserve with a motorcycle track and a tennis court. Its census populations have been 95 (1911), 350 (1933) and 156 (1966).