Surveyor J.T. Thomson named Lauder after the Scottish Border town of Lauder in Berwickshire.

On the 7^th June 1879 at Wingatui near Dunedin, the first sod was turned by Vincent Pyke MP for Dunstan to formally begin construction of the Central Otago Rail Line. By 1891 the line had reached Middlemarch in the Strath Tairei – it took another 7 years to reach Ranfurly.

In 1904 construction of the rail line had reached Lauder and in June 1904 Daniel Donnelly applied for a licence to operate the Railway Hotel in Lauder. Despite an objection from William Leask who operated the hotel in Omakau, the licence was granted and the hotel opened for business later that month.

The Hotel was originally located next to the car park entrance gates facing the rail line and in 1960 the Publican at the time – Ralph Phillips had the building cut in two, turned around and moved to its present location facing the main road.

The story is told that the contractor before shifting the building placed a glass of brandy on the door step and promised to shout the bar if one drop was spilt during the move – he kept his money.