The bay was almost certainly first sighted by the Dutchman Pieter Nuyts who sailed across the Great Australian Bight in 1627. It was not explored in any detail until 1802 when Matthew Flinders, slowly circumnavigating Australia in the Investigator, explored the Bay and named it after his lieutenant, Robert Fowler. Flinders and his men actually went ashore here thus becoming the first Europeans to step onto South Australian soil. It is interesting that the name Fowlers Bay was not officially adopted until 1940. Prior to that it was variously known as Port Eyre, Tarambo and Yalata - a local Aboriginal word which meant something like 'shellfish' or, perhaps, 'oysters'.
The existence of seals in the area and the access to the whales in the Southern Ocean saw a small settlement, known as Yalata, grow up in Fowler Bay in the early 1800s. It was from this settlement on 25 February 1841 that Edward John Eyre, accompanied by a white man named Baxter, and three Aborigines one of whom was named Wylie, attempted to cross the Great Australian Bight. They reached the present site of Eucla on 12 March 'after having passed over one hundred and thirty-five miles of desert country, without a drop of water in its whole extent, and at a season of the year most unfavourable for such an undertaking'.
On 29 April, after the party had been dogged by lack of water and seriously deteriorating conditions, the two Aborigines murdered Baxter, took most of the remaining supplies, and disappeared into the desert. In his remarkable book Journals of Expeditions of Discovery into Central Australia and overland from Adelaide to King George's Sound in the years 1840-41, Eyre vividly recounts the fears which he experienced: 'At the dead hour of night, in the wildest and most inhospitable wastes of Australia, with the fierce wind raging in unison with the scene of violence before me, I was left, with a single native, whose fidelity I could not rely upon, and who for aught I knew might be in league with the other two, who perhaps were even now, lurking about with the view to taking away my life as they had done that of the overseer'.
This fear of the local Aborigines was to emerge again in the 1870s when, after a Court House had been erected at Fowlers Bay, the government decided to make an example of an Aborigine who had been found guilty of murder. A gallows, government officials and mounted constables were all shipped from Adelaide in order to teach the local Aborigines a lesson in British justice. The Aborigine was duly executed, with much pomp and ceremony, in front of other Fowler Bay Aborigines.