Australians owe a great debt to all the persons involved in the development of the Australian Cattle Dog, for without it the beef industry of Australia would undoubtedly have had great difficulty in developing into the important industry that it has become.

In 1840, George Elliott of Queensland, was experimenting with Dingo-blue merle Collie crosses. Elliott's dogs produced some excellent workers. Cattle men were impressed with the working ability of these dogs, and purchased pups from them as they became available. Two brothers, Jack and Harry Bagust, of Canterbury in Sydney, purchased some of these dogs and set about improving on them. Their first step was to cross a bitch with a fine imported Dalmatian dog. This cross changed the merle to red or blue speckle. The Bagusts' purpose in this cross was to instill the love of horses and faithfulness to master into their dogs. The result was a compact active dog, identical in type and build to the Dingo, only thicker set and with peculiar markings found on no other dog in the world.

The breed became known as the Australian Heeler, then later the Australian Cattle Dog, which is now accepted throughout Australia as the official name for this breed. However, even today, some people can be heard calling them Blue Heelers or Queensland Heelers.