In 1657, Abraham Gabbema led an expedition to find Khoi groups to barter with and to search for the legendary treasures of Monomotapa. On the day that they arrived in the Berg River Valley, the granite boulders, towards the west side of today's town, glistened in the sun after some rainfall. This prompted Gabbema to name this mountain “the Diamond and Pearl Mountain” from which the name Paarl was later derived.

Paarl boasts a unique cultural attraction: it was here that the foundations of the Afrikaans language were laid by the Genootskap van Regte Afrikaners. The "Afrikaanse Taalmonument" (monument to the Afrikaans language) on the slopes of Paarl Mountain, the Language Museum and the Afrikaans Language Route through Dal Josaphat are memorials to this achievement.

The former headquarters of the wine industry in South Africa is also situated here.: This was the famous "Co-operative Wine Growers' Association" (better known by its Afrikaans initials KWV). The KWV became a South African institution that has acquired an international reputation based on its unique achievements and its imprint of quality on the local wine industry. Over the past decade, however, KWV became a completely profit-driven private company that has no administrative role anymore.

Wellington is situated at the foot of the Groenberg on the banks of the Kromme Rivier and is at the centre of the Cape Winelands with its picturesque environment and numerous wineries. The former name of the 'dorp' was Wagenmakersvallei, meaning, Wagon-makers valley, or Val du Charron by the French Huguenots. After the eventual establishment of the town in 1840, the name was changed to Wellington in honour of the Duke of Wellington, renowned soldier and conqueror of Napoleon at the Battle of Waterloo.

The town is at the base of one of the oldest mountain passes in the country, Bain's Kloof Pass, built by master road-builder Andrew Geddes Bain.