Capella, a rural town, is 260 km west of Rockhampton and 50 km north of Emerald. It was the administrative centre of Peak Downs Shire.

The Peak Downs district was explored by Leichhardt in 1845 and by the 1860s was occupied by several pastoral stations. Copper mining at Clermont (1862) to the north of Capella Creek brought a significantly increased population, and a town was surveyed at Capella Creek. In 1882 a railway line was opened between Emerald and Clermont, passing through Capella which gained some stores and rudimentary inns for railway construction workers. In 1883 farm selections were resumed from nearby pastoral runs and a school was opened, and by 1900 Capella's population was about 250. It was described in 1903 in the Australian handbook:

With a population of scarcely over 300 a hall and picture theatre were built in 1926, a bank building was added in 1930 and the Peak Downs Shire hall was completed in 1936. During World War II the town declined, but the surrounding district came under an unusual development with the Queensland British Food Corporation converting grazing land to grain production. Poor seasons defeated the project, and the holdings were subdivided and sold in the early 1950s. The project nevertheless inspired the planting of sorghum and sunflower; bulk storage was built at Capella in 1964. Diversification into grains led to the formation of the Capella and District Show Society (1961). During the 1950s new town facilities included reticulated electricity (1954), reticulated water, septic tanks and sewering (1962-80) and a swimming pool (1969). Lutheran and Catholic churches were added to the stock of earlier Protestant buildings.

Capella received an unexpected boost from the opening of the Oakey Creek coal mine, despite the establishment in 1982 of a dormitory town, Tieri, for the mine. The Shire benefited financially from mining and funded the Capella cultural centre. A pioneer village, a further town attraction, includes the rebuilt Peak Downs homestead.

Capella has golf and bowling clubs, a showground, a local reservoir for town water, the former shire hall and offices, local shops, a primary school (1883) and a high school (1989).

A 35 km water pipeline from Tieri was connected in 2003 to secure Capella's water supply.

Its census populations have been:

Census Date Population
1881 8
1901 266
1933 303
1961 265
1976 364
1981 660
1991 871
2001 760
2006 796
2011 926

Maureen Burns, Worth the gamble: the first fifth years : personal recollections from those who shaped the Peak Downs/Retro Holdings 1956 to 2006, Capella, Capella Pioneer Village, 2006

M.V. Purdie, ed, Capella: a brief history of the settlement of Peak Downs, Capella, Book Committee, Rockhampton, City Printing Works, 1983

John White and Heather Garside, Capella - 125 years, Capella, Central Highlands Regional Council, 2008

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