Dalyston is a rural village on the Bass Highway, west Gippsland, 7 km north-west of Wonthaggi.
The formation of the village dates from about 1890 when a mechanics' institute hall was built. There is a record of a Catholic church being built in 1902 on land donated by Patrick Daly – hence the name Dalyston. Daly also donated land for a mechanics' institute (1911), and a racecourse was laid out on his property for the Powlett Race Club in 1902, coinciding with the opening of Daly's Ozone Hotel.
In about 1922 Dalyston, being reasonably central in the Phillip Island and Woolamai Shire, was chosen for the construction of shire offices. (Before then the shire had been headquartered at San Remo and Kilcunda.)
Daly had also been active in securing the district's first school in 1902. In 1912 the school site was transferred to the village, on land on that occasion sold to the Education Department. The village also had the benefit of the Wonthaggi railway line (1910).
Dalyston was unable to progress beyond the size of a village because of its proximity to Wonthaggi. In 1979 the shire offices were moved to Archies Creek, which within a few years itself suffered a downturn from the closure of its large dairy factory. Dalyston is situated in dairying and grazing country and has a primary school (Powlett River 49 pupils, 2014), a general store, a hotel, a hall (1890) and a recreation reserve. Its census populations have been:
Joseph White, One hundred years of history, Shires of Bass and Phillip Island, 1974