Today the community is dispersed along the Dignams Creek valley, which extends from the southern slopes of Gulaga towards Wallaga Lake. It is a rural locality rather than a conventional village, with Dignams Creek forming part of the boundary between the Bega Valley and Eurobodalla shires.European activity in Dignams Creek began by the mid-nineteenth century. We know that the creek was named Dignams Creek by 1852 when alluvial gold was discovered in the creek. This led to mining commencing around 1860.

After Robertson's Crown Lands Acts of 1861 opened the district to selection, more permanent agricultural settlement followed from about 1870, when free selectors began establishing farms along the creek. At this time, Dignams Creek’s economy was built around gold mining, farming (especially dairying, together with crops and livestock) and timber.

By 1871 several selectors were already living in the valley, and as the farming population grew a school (1877) and church (1878) were opened. The school moved from the northern side of the creek to the southern side near Dignams Creek Road in 1916 and closed in 1942. The church closed in 1968 and is now a home. A memorial hall commemorating the First World War served as a dance hall and polling booth stood on the north side of the creek until it was dismantled in 1978. After the First World War, a Memorial Avenue was established near the junction of Dignams Creek Road and the main road, with a pine tree planted for each local serviceman. These trees were killed in the fires in 2020.

Dairying and timber remained the main industries until about 1950, after which a number of farms diversified into beans and seed growing — Dignams Creek had its own seed producers' group between 1950 and 1957, the district being relatively disease-free and good for seed. Dairying declined further with the 1965 - 1969 drought and the shift to beef production. From the 1980s, a number of farms were subdivided and agriculture declined. Forestry finished in 2001 when the Kooraban National Park was created.

Because this was the major north-south land route in the region, the early ford where the old bridge is located was replaced around 1890 by a McDonald truss timber bridge. This was washed away in the floods of January–February 1934 and a reinforced concrete beam bridge went up in 1935. This was built before the Main Roads program reached the area, effectively fixed the alignment of the Princes Highway here for the next eighty years. When the Main Roads work reached the area, the Main Roads Board used Dignams Creek as an administrative centre for road widening and realignment works, and at one stage about half the children at the local school were from road-worker families.

An older road to Bermagui also ran down through the travelling stock reserve at the bridge. This was a major route for droving pigs from Eurobodalla to the port at Bermagui and had fallen out of use by the early twentieth century.

The narrow bridge and tight curves gave the section a bad crash record. A preferred corridor was announced in 2010 at an estimated $85 million, then revisited as costs rose. Major work on the eventual $45 million upgrade began in April 2017, traffic moved onto the new alignment in December 2018, and the project was finished in 2019. The old highway and 1935 bridge now sit beside it, bypassed.

Today, traces of this history remain in the old highway and 1935 bridge, former school and church sites, old road alignments, farm remains and the shape of the creek valley itself.