Shellharbour was a meeting place for Aborigines who called it 'Yerrowah'. The first Europeans to set foot in the area were explorers George Bass and Matthew Flinders in 1796.
In 1803 a Captain Issac Nicholls shipped cattle into the district when the Sydney area was in drought. Some time between 1803 and 1817, when the government was issued free grazing rights, James Badgery grazed his cattle on the land between Lake Illawarra and the Minnamurra River under the supervision of herdsman Bob Higgins.
Explorer George Evans camped the night at Barrack Point in 1812 en route to Appin. The region's huge reserves of cedar were being illegally exploited around this time.
In 1816 Governor Macquarie ordered his surveyor general, John Oxley, to negotiate free land grants. Consequently, between 1817 and 1831, the land around Shellharbour was divided up and issued in the form of 22 free grants. The first grant (700 acres) was 'Waterloo', issued to Andrew Allan on land now occupied by the Albion Park airport.
Shellharbour was first established as a port in the 1820s by the cedar cutters who used it as a convenient loading point. The cedar was floated out on wooden rafts to ships which waited off the coast. By the following decade the port was in regular usage.
By 1828 D'Arcy Wentworth, the largest landholder, owned 14 050 acres south of Lake Illawarra on which were grazing 1600 cattle.
In 1851 a private township was laid out around the harbour by the Wentworth family. It was named 'Peterborough'. This created some confusion as the white settlers had been using the name Shellharbour (sometimes spelt Shell Harbour) because of the vast quantity of shells on the shores. The name 'Shellharbour' was officially recognised in 1885.
The first stores appeared in the 1850s, one of which still stands. A stone watch-house was erected in 1861 followed by a courthouse and gaol in 1877. Prior to this the local constable simply tethered felons to a tree.
Wheat, dairying, cattle and bacon industries thrived in the second half of the 19th century and Bass Point had a gold strike in 1868, exploited by Thomas Reddall and Edward Killalea.
By the 1890s, Albion Park, at the junction of the roads from Macquarie Pass to the sea and from the north to the south, had become the major centre in the region.
Coalmining commenced in 1893 but it was the rich deposits of basalt at Bass Point which proved most profitable. Quarrying began in 1880 and it has continued until the present with vast quantities of 'blue gold' being removed and shipped from the jetty which juts out into Fullers Bay. The lease will run until 2020.
It was at Bass Point that the Wodi Wodi Aborigines came to catch fish and live off the shellfish they found on the rocks. A number of shell and stone artefacts have been found, including one of the most ancient edge-ground axes outside of tropical Australia. Some remnants, such as middens, indicate human activity in the area 17 000 years ago. Bass Point is a rare example of a Pleistocene era site in south-eastern Australia.
With the arrival of the railway in the area in 1887 the town of Shellharbour was ensured survival by the day trippers and tourists who poured into the Illawarra on the weekends.
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