The suburb takes its name from the lake, Lake Coogee, in the area, which translates to "Body of water" in the native Aboriginal Nyoongar language. Originally this lake was named Lake Munster after Prince William, the Earl of Munster, and later King William IV. The aboriginal name Kou-gee was recorded in 1841 by Thomas Watson and has been variously spelt Koojee, Coojee and Coogee.
The first European settlement in the region occurred with the ill-fated settlement by Thomas Peel at the Clarence townsite behind Woodman Point in 1829. The townsite being abandoned in 1831. Settlement of the area commenced in the 1870s around Lake Coogee on Rockingham Road (the first road between Fremantle and Rockingham).
The current residential area of Coogee commenced development in the 1980s. Previously it was an area of limestone ridge, small rural lots and market gardens in the west and south portions of the current suburb. Denser residential devevelopment was limited to a small area in the northwest of the current suburb about Beach Road and King Street. That area was better known as the locality of Coogee Beach. Some buildings still standing in that area date back to the nineteenth century.