There are many stories about the creation of the didgeridoo.

There is one saying that during the DreamTime there was giant that use to visit an aboriginal tribe. The giant had the habit of abducting the tribe's women, but one day two women could run way of the giant and get back to the tribe. The elderly thought up a trap: they will dig a well and then they will cover it with branches and leaves to get the giant. When the giant came back, the men of the tribe put the two women behind the well to use them as bait. The giant ran towards them and felt in to the well, then, the men of the tribe drove their lances in to his body until he looked like as a hedgehog. He felt such a strong pain that he bend over himself and blow his penis and a wonderful sound could be heard. The men of the tribe got so fascinated that they did the same, but they could not get any sound, then they went into the forest and got an eucalyptus trunk hollowed by termites and blown through it. That way they got the same sound as the giant. The didgeridoo was born and since then was used by the men of the tribe to accompany the storytellers, rituals and dances

Another history....

At the early beginnings of time, a group of Australian aborigine was looking for wood for the fire. They found different kind of branches, some were eucalyptus. When they had enough wood they came back to the campsite and they started to build a fire to cook their food, but suddenly they heard a strange sound. Full of fear they stopped whatever they were doing because they though it could be evil Spirits, but sounds were good and nice: they were the Spirits of the wind blowing a eucalyptus trunk hollowed by termites. They did the same and in a short time, they got similar sounds blowing the hollow sticks. This tradition is still alive nowadays when didgeridoo is used to accompany rituals or talk with the spirits of their ancestors