Represented now by a small collection of buildings beside the Hamilton-Ararat railway line 13 km east of Hamilton, Strathkellar takes its name from the sheep run bought for subdivision from the McKellar family in 1905 by the Closer Settlement Board. Earlier, in 1860, Thomas McKellar, noted for introducing hares and deer into the area for sporting purposes, had bought the eastern half of the original Grange sheep run and applied his family name to the homestead and property. Apart from subdividing the run for agricultural holdings the Board established smaller blocks of land beside the railway line to form a social and commercial nucleus for an anticipated surrounding agricultural community.
The first settlers took up their land during 1907, and by 1914 there were 61 holdings around Strathkellar. The school opened in 1908 with 41 pupils, and in November of the same year a railway siding and station were opened to cope with increasing amounts of farm produce. The hall, doubling as a library, opened in 1911. Experimental crops of flax were tried in the 1930s, and in 1940 with over 500 acres producing flax, a mill employing around 180 people was opened. It was operated by the Commonwealth Department of Supply as a defence industry and closed towards the end of 1959. More recently, farms have tended to amalgamate and mechanisation and a return to grazing have seen a considerable reduction in the local population, closure of the station and school in 1970 and a dependence on Hamilton for goods and services.
A kilometre to the north-east of Strathkellar is the townsite of Warrayure. Surveyed in 1867, Warrayure never developed beyond an hotel and a small scattering of houses but the area attracted Lutheran farmers, and Warrayure Lutheran church (1909) on the Glenelg Highway is still an active church. The ruins of the flax mill survive, standing prominently in a paddock towards Hamilton.
Strathkellar's census populations have been:
E.F. Mayford, The growing of flax in the Hamilton district: Strathkellar and Penshurst mills, the author, c1986