Illabo, 16km north east of Junee and 13km south west of Bethungra, appears to have been part of the Ironbong Run, later Eulomo, originally held by Dr (later Sir Charles) Nicholson.
By 1849, Stephen White of Merribindinah Run had acquired the Illabo area.
The Geralgambeth Run to the south was acquired by Mick Macnamara until 1850, then John Morris in 1858 from Daniel Cooper.
The Morris family held Geralgambeth until 1905 and there are still descendants in the district. Land selection was slow.
By 1872, most land selections from 16 to 128 hectares had been taken by squatters and their families.
Alan McKenzie was the first known outside selector taking a block on Geralgambeth while the Hamiltons, Blacks, Butts, Boytons and Trueloves followed.
Henry Truelove selected land just north of the present day Illabo cemetery in 1877 and erected the Billabong Hotel and a store.
One of the traditional domed brick underground tanks is still visible at the site near peppercorn trees. James Pratt acquired land along the Old Sydney Road for a coaching hotel.
William Cowley selected 256ha in 1876, where Bethungra Park Homestead stands and from 1879, his brother Frank built it up to a much larger property.
A number of other large aggregations were also put together.
Near the Billabong Hotel and behind the cemetery is a former quarry from which material for railway construction, ballast and buildings in Junee was obtained and bricks were made nearby.
A tent camp for railway construction workers was also established. At that time, water for the camp and other needs would have had to be carted there on horse or bullock wagon.
A railway station was built 2km to the north on level ground with provision for trains to pass on the single track.
This first platform was opened as Billabong but owing to the number of large pastoral holdings of the same name in the region, the name was shortened to Illabo to avoid confusion in mail delivery.
There had been no official provision for a village but after buildings appeared on the southern side of the railway, which had arrived in 1878, a survey of the village area was completed in 1897.
An auction in August, 1897 saw brisk sales on the block bounded by Crowther, Lester and Layton Streets, where the hotel, post office, store, churches and other businesses were built.
Other land sales were made and the village steadily developed, becoming an essential centre, along with Bethungra, to handle train transport of wool and wheat to markets and accept supplies for the surrounding district.