In 1881 a Vigilance Committee was formed and was responsible for getting a municipal council established. At a town meeting in August 1881 it was decided to form a committee of thirteen to be called the Bowral Vigilance Committee. It was also decided to send a deputation to the Minister for Lands to get him to acquire land as a recreational ground. In February 1884 at a meeting a motion for incorporation gained two votes in favour, which were from the proposer and the seconder. In August 1884 the committee then decided to call a public meeting to discuss establishing a municipality. The meeting was in favour of the proposal and a petition signed by 140 people was sent to the Government. On the 18th of February 1886 the town was gazetted a municipality. On the 8th of April 1886 nominations were called for with 24 candidates deciding to run for election. On the 13th of April the election was held with JG Morris, W Charker, JJ Campbell, J Loseby, J Hodgson, JL Campbell, R Bridge, C Funston and M Rice chosen. Topping the poll was Morris with 66 votes. On the 16th of April the Council meeting was held with JL Campbell being elected as Mayor. On the 21st of April 1886 the first meeting of Council was held in the School of Arts and in the next week the Town Clerk was appointed as WJ Osbourne who was on a salary of £50 per year.

Bowral inherited miles of unmade streets covered with standing timber with the Council deciding that one of the first jobs is to clear Bowral and Banyette Streets south of Boolwey Street and portions of Wingecarribee, Boolwey, Bendooley, Burradoo and Bong Bong Streets. In August 1886 tenders were called for the job with the job still being carried out three years later after which they were roughly formed.

In February 1889 plans for Council Chambers were prepared and in July a tender for £944 was accepted. The Council borrowed £1000 from R Loseby to build the structure, which opened on the 22nd of January 1890.

Initiated by the great Macadam the system of road making was followed by Council for many years. A trial asphalt crossing was placed in a main street in March 1890 and in April 1893 it was decided to lay down a tar-paving strip in Wingecarribee Street as a footpath. In 1920 a portion of the road in Bong Bong Street was coated with tar macadam as an experiment with many bitumen roads being made since.

The main street had 15 kerosene lamps erected in 1888. In 1889 a gasworks that was privately owned was established that laid two miles of pipes. On the 18th of May 1889 the Mayor lit the first street gas lamp that was on the corner of Bowral and Bong Bong Streets. Gas took over from kerosene as the streetlights. Council bought the gasworks for £7000 in 1882 with work on a new gasworks beginning in 1957.

A discussion took place in 1916 regarding a proposal to connect Bowral with the electricity generating plant in Port Kembla but no action was taken. The Public Works Committee recommended to Parliament in 1921 that a transmission line should be built to carry current from Port Kembla to the Southern Highlands with electricity from this source being switched on the 31st of January 1925. The streetlights then changed over to electricity.

In 1889 a scheme was decided upon to obtain water from Loseby's property east of Bowral but that was as far as it went. Surveys were made at various times for a water supply but no action was taken to set up a scheme until 1907 when it was decided to build a reservoir in Gladstone Road with a main from that point and standpipes at intervals to the town. Householders from the standpipes obtained supplies. In 1908 water was obtainable and townspeople were allowed to lay pipes from their homes to the main. A referendum was held in 1912 regarding whether a complete water supply scheme should be adopted which was carried in favour of a majority by one. Only 89 out of 404 ratepayers entitled to vote actually voted. Council on a 6 to 3 vote decided to ask the Government to take steps to carry out works for a water supply but it was not until 1922 that water was turned on with a filtration plant being installed in 1929.

A report on a proposed sewage scheme was put to Council in 1927 and it was unanimously agreed to amend the plan but work didn't start on the scheme until July 1933. In October 1935 Council took it over with householders then authorised to have their houses connected to the system.

Tree planting by the Council began in 1886 with 50 trees set in Station Street. A report in 1889 said tree planting was going on vigorously and the grounds of the Methodist Church and the hospital were having trees set. In August 1891 Arbour Day was held at the school and 60 plants were planted. After a lapse of a number of years it was recommended to start planting again in 1927. In 1939 it was decided to have a plan for tree planting in the streets prepared.