Hawks Nest was named after a large tree which was a favourite nesting place of hawks, situated near the old hotel and used as a navigational marker in the early days. The area was occupied by the Worimi Aborigines prior to white settlement. The first Europeans to work in the area were timbergetters who took an interest in the forests (mostly red cedar) along the Myall River early in the 19th century. The timber was hauled by bullock train to mills, then carted by punt down river to Hawks Nest and the Winda Woppa peninsula. Ships bound for Newcastle and Sydney picked up the timber, unloading the stone they carried for ballast on the banks of the river, much of it being used in the construction of the rock walls which can still be seen today. A timber mill was built at Winda Woppa in 1920 and shipped out 13 million square feet of wood in 1922.
The Australian Agricultural Company set up in the area in 1826 (see entry on Port Stephens). Another early industry was boat building. One pioneer was Frank Motum who arrived from England in 1877 and, with his family, established a hauling business shipping fish to the Newcastle and Sydney markets. The mouth of the Myall was traversed by punt until a ferry service was established in 1928, replaced by the bridge in 1974.