Lyndhurst began its life as a railway siding when construction of the Port Augusta Government Gums line was started in 1878. When traffic was moving along that line Lyndhurst also became the railhead for cattle from the northeast. Cattle which had previously been walked along the Strzelecki Track to Farina, now used the shorter track to Lyndhurst.
In 1880 it was listed for postal services but the amount of mail delivered to the local station people and the nearby mining operations was rather small. Hawkers would do the round several times a year and anything else required had to be ordered from Port Augusta or Adelaide. Even so, Mr W. Bunting found it necessary to put a notice in the newspaper in 1888 that he would not be responsible for any debts made by his wife.
Some improvements at the siding were made in 1890 when a post office and a store were opened. When a year later the storekeeper, Thomas Pearce, was granted a wine licence business improved markedly. He sold out in September 1892 to Michael Carrigg who served the small settlement for the next three years.
In 1896 the newspaper reported that the siding, which had recently been surveyed and named Lyndhurst, was like the rest of the north very dry. The water in the dam was very low and quite unfit for human consumption. What was needed most was a Hotel! Finally on 31 December 1896 the Lyndhurst Hotel was officially opened and operated by John Henry Edwards and his wife Ruby. They served their thirsty customers for almost twenty-five years.
The hotel, originally from Mount Freeling, was dismantled and moved by Edwards on a bullock wagon to Lyndhurst. Immediately it became, and remained, the most important place in the hot, dusty, dry and tree-less town, where children ran free and wild until 1920 when they had to attend the newly opened school.
Transport still remained a problem. Although the train did stop, goods had to be taken to nearby stations by teamsters. Between 1903 and 1906 Alexander William McMillan was one of them. He lived at Lyndhurst until he moved further north to Farina in 1906.