Early in 1796, the first windmill in New South Wales was built on what became known as Windmill Hill. It was used to grind grain into flour and was one of the colony's first steps towards self sufficiency. The mill tower was built of stone and the machinery and grindstone were imported from England. But they did not work for long. The canvas sails were stolen, the machinery was damaged in a storm, and by 1800 the foundations were giving way. Before it was ten years old, the mill was useless. This brief slice of history is still echoed in the name 'Millers Point', the harbour landing where grain was unloaded.
In 1803 Governor Hunter ordered a fort to be built on the site of Windmill Hill to defend the colony from rebellious convicts and possible French attack. The fort called Fort Phillip, was never fully completed and never fired a single shot in anger. In 1825 the eastern wall of the fort was converted to a signal station. From here flags sent messages to ships in the harbour and the signal station on the South Head of the harbour.
In 1840 the fort was partially demolished. A new signal station, designed by the colonial architect Mortimer Lewis, was built on the east wall in 1848. This is now the oldest building on the hill.
Plans for Sydney Observatory began as a simple time-ball tower, to be built near the signal station. Every day at exactly 1.00pm, the time ball on top of the tower would drop to signal the correct time to the city and harbour below. At the same time a cannon on Fort Denison was fired. It was soon agreed to expand the tower into a full observatory.
Designed by Alexander Dawson, the observatory consisted of a domed chamber to house the equatorial telescope, a room with long, narrow windows for the transit telescope, a computing room or office, and a residence for the astronomer. In 1877, a western wing was added to provide office and library space and a second domed chamber for telescopes.
Under Henry Chamberlain Russell 1880's Sydney Observatory gained international recognition. Russell took some of the first astronomical photographs in the world, and involved Sydney in one of the greatest international astronomy projects ever undertaken, The astrographic catalogue. The catalogue was the first completed atlas of the sky. The Sydney section alone took 80 years and 53 volumes to complete.
After federation in 1901, meteorological observations became a Commonwealth government responsibility, but astronomy remained with the states.
Sydney Observatory continued working on The astrographic catalogue, keeping time, making observations and providing information to the public. Every day, for example, the Observatory supplied Sydney newspapers with the rising and setting times of the sun, moon and planets. By the mid 1970s the increasing problems of air pollution and city light made work at the observatory more and more difficult.
In 1982, the decision was made to convert Sydney Observatory into a museum of astronomy and related fields.