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Formerly town Airlie after request from Lands Department to Proserpine Shire Council in December 1935 for a name for a new sub-division on the coast. Then Chairman Robert Shepherd suggested Airlie and had it confirmed by Council 9 January 1936. Shepherd was born in Montrose, Scotland and probably had some association with the nearby Parish of Airlie. At the time it was rumoured (wrongly in the event) that the Earl of Airlie was to be the next Governor General of Australia and this may have influenced Shepherd's choice. The name Airlie Beach was approved by Governor in Council 31 January 1987.