The earliest inhabitants of Port Stephens were the Aborigines of the Worimi Tribe and at the time of white settlement there were about 400 Aborigines living around the estuary of the Port. One observer wrote that the Port Stephens Aborigines were more prone to laughter than tears. They seemed always to regard life as a huge joke to be enjoyed to the utmost. The local environment was favourable for hunter-gatherer living and their non-destructive lifestyle was in such sympathy with the environment that it had already lasted tens of thousands of years. Their knowledge of the plants and animals around them has not been surpassed.

There are numerous Aboriginal relic sites in the area, the most obvious being the "Canoe Trees" or Stringy Barks at Little Beach. Canoes were made from the bark, the ends plugged with clay and when in use a fire always burned on a bed of clay at the back. Paddles made of seasoned hardwood were shaped like a large spoon and these paddles were used in a kneeling position from the middle of the 4.5m canoe. Fishing lines were made from the inner bark of young Kurrajong trees or Sally Wattle twisted, and rendered watertight by soaking in the sap of the Bloodwood tree. Hooks were made from ground down oyster shells. Women of the tribe had the first joint of their little finger removed to be dropped in the fishing grounds so that fish would be attracted to that hand and it was forbidden to fish if you had just eaten fruit!

Fishing spears were made from the flowering stem of the Gymea Lily of the Grass Tree and tipped with 4 prongs of ironbark, the lot was held together with Yellow Gum (grass tree).

Sydney Rock and Pacific Oysters were a large part of the Port Stephen’s Aborigines diet. Mountains of shells, known as shell middens, can be seen today in clusters along the Port Stephens coastline. On the foreshore at Lemon Tree Passage lies an ancient Aboriginal Shell Midden that travels for more than 2km and is up to 1m deep.

Four middens and a burial site are located at the base of Yacaaba Head and middens are located at Fingal Spit, Anna Bay, Schnapper Point, Boat Harbour, Skate Bay and Fishermans Bay. There is a burial site at Skate Bay and grinding grooves at Morna Point.

For thousands of years the Worimi enjoyed unchallenged rights to the area's plentiful food supplies, until a group of European men rowed boats upstream along the main river, now known as the Hunter and put ashore to camp on its eastern bank near its junction with the Williams River. This group led by Lieut. Colonel Paterson in 1801 was exploring the Hunter River and its tributaries, the Williams and Paterson. These Rivers later became main highways for people and freight throughout the 19th century, with regular steam boat services direct to Sydney. Towns such as Raymond Terrace, Seaham, Clarence Town, Hinton, Morpeth and Paterson developed on the river banks during the 1820s and 1830s. The Paterson River now forms the western boundary of the Port Stephens local government area, and the Hunter River its southern boundary.
The name Port Stephens was adopted by Captain James Cook when he passed on 11 May 1770, honouring Sir Philip Stephens, who was Secretary to the Admiralty. Stephens was a personal friend of Cook and had recommended him for command of the voyage.

Port Stephens was not entered by Europeans until late in 1791 when the "Salamander", a convict transport paid a visit, during which an eye-sketch of the harbour and some of its arms was made. The Salamander, a ship rigged vessel of 320 tons, three decks and 16 foot draught, sailed from Plymouth with 160 male convicts, on March 27th, 1791.

In March 1795, Lieutenant-Governor Paterson, wishing to obtain some information which he could depend upon respecting the harbour of Port Stephens, sent Deputy Surveyor Charles Grimes in the Francis to Port Stephens. Charles Grimes described the land as low and sandy and he had seen nothing in the harbour which in his opinion could render a second visit necessary!

It seems that the earliest Europeans to live in this area were five escaped convicts, wrecked at Port Stephens in 1790. They were befriended by the Worimi, who took them into the tribe, giving them wives, by whom some had children, and taking them along on their wanderings. Five years later four of the white men were 'rescued' by Captain W.R. Broughton, of HMS Providence, during a voyage from England as escort to the Transports Reliance and Supply. After a voyage of six months, the fleet was driven by bad weather past Port Jackson and was obliged to run into Port Stephens for shelter on August 23rd, 1795.

During the early 1800’s the Port was visited by Governor Macquarie and surveyed a few years later. In the late 1820’s a small garrison of soldiers was established at Friendship Point to try to prevent escaped convicts from Port Macquarie crossing the narrow section of Port Stephens en route to settled areas further south. The area soon became known as Soldiers Point, a name that was to be adopted in later years.

In 1824 Captain William Cromarty was allotted a grant of 300 acres "for efficient services rendered to the Government", at Hunters River, but later he decided that land on the northern side of Port Stephens was more valuable and transferred his land grant to a site on the Karuah River. The Australian Agricultural Company was anxious to claim the land stretching northward from the shores of Port Stephens and wanted it without the encumbrances of independent settlers. Thus another land transfer was effected with Captain Cromarty taking up final permanent residence on "300 acres, more or less" at Salamander Bay on a long finger of land poking north-east into the harbour (Soldiers Point). Captain Cromarty and his eldest son disappeared at sea off One Mile Beach on 1st September, 1838. The grant was not fulfilled by law until July 1845 in the name of the surviving son Magnus.

In the early days of Port Stephens the only method of transport was by water as no roads existed. Apart from a few privately owned vessels such as the Australian Agricultural Company's boat Lambton, most of the early ships in the Port were whalers, timber and cargo traders and fishing boats, Some of the bigger boats which ran from Newcastle and Sydney to pick up timber brought up stones as ballast. These stones were often unloaded and placed on the banks of the Myall River.

Apart from catching a steamer direct to Newcastle, an alternate method was to travel by boat to Tellegherry (now Lemon Tree Passage) where the boat was met by Mr. John Rooke who, with his spring cart and 3 horses drove the traveller to Raymond Terrace. At Raymond Terrace the traveller then caught the Matilda (owned by Hart and partner) to complete the journey to Newcastle.

In the early l900's the 75 foot yacht the Defender, owned by Sammy Dark (owner of the Cold Stores at Honeysuckle Point, Newcastle) sailed every day, except Saturday, to Port Stephens where she berthed at both Nelson Bay and the Duckhole (Pindimar). The Defender transported stores, freight and general merchandise to the area and returned with fish, lobster and dairy products from Karuah.

In 1904 Hugh Thurlow and Henry Boyce began a launch service from Salt Ash to Nelson Bay and Tea Gardens, return, to connect at Salt Ash with a horse and buggy service owned by Mr Bryant. Passengers and cargo were then carried on to Stockton. Next came a car service, run daily by Mr A. Blanch and Mr M. Blanch through a bush track to Stockton. In 1926 the Rev. Wilbour Brook, the Church of England Rector, was the first man to drive a T Model Ford through a sand track from Williamtown to Nelson Bay. The daily car service run by the Blanch brothers was sold and in 1957 the Port Stephens Bus Company bought the run.

Before and after World War 1, the Hunter River Steamship Company, carrying from 300 to 400 passengers, ran picnic excursions from Newcastle to Nelson Bay.

Transferred to the Royal Australian Navy (RAN) in 1915, light cruiser HMAS Psyche was a troop convoy escort in World War I. The 95m long, 2135 tonne vessel also took part in the Battle of Bitapaka when involved in operations to capture Germany's Pacific colonies. An unwanted war relic by 1918, she was sold to the Moreland Metal Company on 21 July 1922, who used her as a timber lighter (storage) in Port Stephens in 1923. Then just called Psyche, she was moored in Salamander Bay for about 17 years until she suddenly sank there in 1940. The wreck was later broken up by RAN clearance divers during an underwater demolitions training exercise. Psyche came to an undignified end without ever having fired a shot in anger.

Read about the development of the Port Stephens economy - click here.