Settlement began at the location in 1876 and by 1890 a small town had developed. The town was once known as Fassifern Scrub and then Engelsburg after the first settler of the town. The town has a very rich German history, having been established “almost exclusively” by German settlers, reflected today in the many Anglo-German road and street names as well as the many local German settler descendant surnames. The name changed to Kalbar because of anti-German sentiment in 1916, though only first applied to the railway station. The Engelsberg School of Arts did not change to the Kalbar School of Arts until July, 1918. The Mount Edwards railway line reached the town in 1916.
Kalbar State School opened in 1879.
Engelsburg Post Office opened on 7 July 1897 (a receiving office had been open from 1878. known as Engels for five years) and was renamed Kalbar in 1916.
During the 1899 referendum to decide if Australia should become a federation, Kalbar registered the highest No vote of any town in Queensland. In 1920, the Kalbar School of Arts hall and half the businesses in town were destroyed by fire.
From 1961 to 1990, Kalbar held a large annual celebration, the Fassifern Potato Festival. The event included a street parade with motorised floats culminating at the show grounds and continuation of festivities. Some artifacts from the festival can be found at the Templin Historical Museum. Harvest Festivals organised by the local Salvation Army church extended back to the 1920s. The annual agricultural show is held in June.
At the 2016 census, Kalbar had a population of 1,093.