The first formal settlement of the Algoa Bay region took place in 1776 when a number of farms were allocated to local Dutch graziers. In 1799 the British erected a military outpost, called Fort Frederick, to overlook the harbour and to provide military support to the Landdrost at Uitenhage. The post was designed to house a garrison of 380 men, which not only provided local farmers with a welcome market for their produce, but also acted as a focus for future civilian settlement. On 6 June 1820 the village was officially named Port Elizabeth, in honour of Elizabeth Frances, the young wife of Sir Rufane Donkin, who had died of fever in India two years previously.
The town's position on the eastern seaboard offered many advantages to the Cape's colonial government. It was an ideal landing place for visitors wishing to travel into the southern African interior, and the route, pioneered by Burchell in 1812, was followed by such notable travellers as Backhouse, Campbell, Bain, Casalis, Smith and Livingstone. In time this became the main route to the Kimberley diamond fields. Port Elizabeth was also the major point of entry for immigrants to the eastern districts, for the military forces charged with their protection, and for missionaries seeking to propagate their faith amongst local tribes.
By the 1860s Port Elizabeth had become the Colony's premier port and its second-largest city. Some of this impetus was dissipated after 1890 as, on the one hand, the country’s financial centre moved to the Witwatersrand, and on the other competing sea ports at Durban and Maputo made the transport of trade goods to and from the southern African interior more specialized. Instead the port began to focus increasingly upon the needs of its neighbouring Karoo hinterland, while developing a base of specialized manufacturing activities. In time it became the headquarters of a number of industries, including motor vehicles, foods, footwear and textiles. Together with this came the development of a progressive trade union movement, and during the 1950s Port Elizabeth became the heartland for a number of democratic organisations.
As resistance against oppressive measures of Apartheid increased after 1961, so then the Black suburbs of Port Elizabeth and its neighbouring town of Uitenhage became a battleground, where the forces of democracy and racial bigotry faced off against each other. It is no surprise, therefore, that at the height of this conflict during the 1980s, the Eastern Cape suffered much of this violence.