The "Local Authorities Act 1902" abolished divisional boards and created city, town and shire councils. Under this Act, Highfields Divisional Board was abolished and its functions were transferred to Highfields Shire Council on 31 Mar 1903. Highfields Shire boundaries and divisions were redefined on 25 January 1913 with some parts taken to form Crows Nest Shire.
Under the "Local Authorities Act 1902", the primary function of Shire Councils was to provide such public services and amenities as parks and reserves, cemeteries, libraries and recreational facilities, water and sanitation services, roads, bridges, wharves, street lighting, public health services (such as immunisations), licences and registrations for businesses, markets and animals, town planning, and the control of noxious weeds and other pests.
The Council was also responsible for administering the Local Fund, and for valuing properties within the Shire for the purpose of determining and collecting rates.
The Council could pass by-laws regarding all matters within its jurisdiction. All such by-laws required the assent of the Governor-in-Council.
The Shire Council included a chairman, town clerk and a number of other members. From time to time, the Council could appoint committees for special or general purposes. Council also appointed its own officers, who were paid from the Local Fund.
Each year the Minister appointed an independent auditor to review the financial statements of the Council. The Council submitted an Annual Statement of Revenue and Expenditure to the Minister, which was published in the Government Gazette.
Highfields Shire was abolished on 19 March 1949, with parts forming Toowoomba City, Crows Nest and Gatton Shires.