Wallagrass, like most of the Saint John Valley, was settled by Acadians fleeing British persecution. The town was incorporated on June 4, 1979 from Wallagrass Plantation, once known as Hancock Plantation.
The village of Wallagrass is just south of Fort Kent, on the Fish River, whose Eagle Lake outlet is in the southern portion of the township. The village of Wallagrass Station is located at the southern end of the township, where Station Road leads to the shore of Eagle Lake. Soldier Pond, named such due to the military installation that was constructed there during the Aroostook War, is a bulge in the Fish River, along which the village of Solder Pond was built.