Cragside, named after Cragend Hill above the house, was built in 1863 as a modest, two-storey country lodge, but was subsequently extended to designs by Norman Shaw, transforming it into an elaborate mansion in the Free Tudor style. At one point, the building included an astronomical observatory and a scientific laboratory.
In 1868, a hydraulic engine was installed, with water being used to power labour-saving machines such as laundry equipment, a rotisserie and a hydraulic lift. In 1870, water from one of the estate's lakes was used to drive a Siemens dynamo in what was probably the world's first hydroelectric power station. The resultant electricity was used to power an arc lamp installed in the Gallery in 1878. The arc lamp was replaced in 1880 by Joseph Swan's incandescent lamps in what Swan considered 'the first proper installation' of electric lighting.
The generators were constantly extended and improved to match the increasing electrical demand in the house, and also provided power for farm buildings on the estate.
The house is surrounded by one of Europe's largest rock gardens.