Although it started as a timber station in 1830, it is best known for being a penal colony. From 1833, until around the 1850s, it was a destination for the hardest of convicted British criminals. The prison closed in 1877.
In 1979 it received funding to be preserved as a tourist destination, due to its historical significance.
On April 29, 1996, the small community was scarred by an event known as the Port Arthur massacre, where a man named Martin Bryant opened fire, murdering 35 people.