The south-east portion of Australia, today known as the State of Victoria, was first sighted in 1770 by Captain James Cook. He had been sent to Tahiti to observe the Transit of Venus the year before, and had sailed on to circumnavigate the islands of Staten Land (New Zealand), which had not been sighted since Abel Tasman first named it 135 years earlier. On his way to the nearest port in Java, Cook decided to examine the coast of Terra Australis.

In April 1770, Cook sighted a part of the south-eastern coast and named it Point Hicks, then landed nearby at Cape Everard. He then sailed north, naming and exploring Cape Howe (where the current Victoria/New South Wales border ends). He went on to name New South Wales, the previously uncharted eastern coast of New Holland (or Terra Australis), and stayed at Botany Bay (site of Sydney) for a week. Eighteen years later, Botony Bay became the first site for a penal colony, and so the settlement of Australia began.

Though the south-east was not visited by sea for over 27 years, it is conceivable that in the first decade of the penal settlement some of the escapees made it that far south over land. Actually, it seems that some even made it there by boat.

In January 1798, George Bass steered his whaleboat into the straight later named after him and discovered seven convicts at Wilsons Promontory. They had escaped NSW (New South Wales) in a stolen boat, which had been wrecked when driven ashore. He took two of them with him, but had to settle the others along the coast as his ship was already full; he gave the five convicts a musket and a compass, and directions back to Sydney (where they would receive fair treatment), but they were never seen again. He sailed as far west as supplies would allow, and discovered Westernport on the 5th of that month, named 'from it's relative situation to every other known harbour on the coast'.

 In October of that year, Bass and his friend Matthew Flinders navigated the straight, which both had been sure existed, in the sloop Norfolk, but failed to notice Port Phillip Bay. Instead, they examined the islands, which they noted might provide the sealing industry with new sites. They also named Wilsons Promontory.

In 1799, Lt. James Grant was sent from England to sail Bass Straight in his brig, Lady Nelson. His aim was to find a shorter route to Port Jackson (as sailing around Van Diemens Land added up to 2 or 3 weeks onto a voyage), as well as look at whaling possibilities in the south. During December of 1800, he noticed from his mast-top a large harbour in the distance, but sailed on towards Port Jackson. He returned in the Lady Nelson in March 1801, spent a while in Westernport, but returned to Sydney when it neared winter.

The Lady Nelson returned again, this time under the command of Lt. John Murray, her former mate. On the 5th of January, 1802, he noticed the heavy seas at the opening of a bay (the notorious 2.5 km stretch known as The Rip). Due to the strong winds, he continued westward before returning to Westernport. On the 1st of February, he sent his mate, William Bowen, and some men through the heads; they returned four days later with news of a bay much larger than Westernport, with coves and possibly mouths of rivers.

On the 15th of February (after waiting for bad weather to abate), Murray sailed into Port Phillip Bay. He sailed down the eastern coast after naming Point Nepean (after the secretary of the Admiralty, Evan Nepean), then raised the Union Jack near Arthur's Seat (a hill he named after an Edinburgh landmark of the same name) on March 8. He named the bay Port King (after Philip King, Governor of NSW) but renamed it to Port Phillip in honour of the first  Governor of the colony, Captain Arthur Phillip.

It was around this time that the Aborigines of the region were first encountered. All seemed to go well between the parties, with the Aborigines admiring trade items, until it was noted that a native was spearing the sailor looking after the boat. Two Aborigines were shot and killed in the retreat back to the boat.

In April 1802, Flinders returned and mistook Port Phillip Bay for Westernport, then thought he had made a new discovery when he realised that was not so. He explored the mostly the west coast of the bay, named some features, climbed some hills, and had even had a friendly meeting with locals with whom they traded red cloth and shag tobacco for Aboriginal weapons. Though he was impressed by the 'pleasing', fertile look of the area, he worried about lack of fresh water. Nonetheless, he stated in his reports that the land showed some promise and that it would undoubtedly be settled one day.

One thing that also impressed him was the natural defence of the bay, which was worth considering in those days. Britain and France were between wars, and French had been seen in the area. In fact, it was Flinders himself who had met the French navigator Commodore Baudin at Encounter bay, just before he first ventured into Port Phillip Bay. News of that encounter had prompted Governor King to send the sloop Cumberland to remind them they were traversing British waters, even though it turns out they were there purely for scientific research.

In 1803, Lt. Charles Robbins, who had commanded the Cumberland, explored the Port Phillip Bay coastline with Charles Grimes (surveyor-general of NSW), and sailed up a 'great river' later called the Yarra. Their news of fresh water and fertile farmland was well-received by the British Government, who saw it as a prospective for another penal settlement.

Lt.-Col David Collins, who had arrived on the First Fleet and had served as deputy judge advocate in NSW before returning to England, was the first to try colonising the Port Phillip District of NSW (as Victoria would be called). He left England with 300 convicts, a guard of marines, and civil staff in two ships, the Ocean and the Calcutta, and landed near Sorrento in October 1803. His conclusion: 'It cannot nor ever will be resorted to by speculative men.'

In June 1804, Collins gave up the settlement and moved to Van Diemens Land (as Tasmania was then called), eventually founding Hobart Town. Had Collins searched for the ‘great river’ described by Grimes, the Port Phillip Bay area would not have seemed so worthless. For the next 20 years, the only ships that came to the shores of Port Phillip District were those of sealers and whalers.

The quarrelsome explorers Hamilton Hume and William Hovell went south by an overland route, reaching Port Phillip Bay in 1824. They examined its western coast near Geelong (from the Aboriginal name for the area, Jillong), and later described it as some of the best land in Australia. However, due to an error in longitude, they mistook it for Westernport, so their reports of the land were to initiate another doomed settlement there. Actually, Hume insisted they had reached Port Phillip Bay, but the Governor took the word of Hovell, who was a retired sea captain. The seemingly glowing reports of Westernport (as well as renewed fears of French activity in the region) prompted Governor Brisbane to send a favourable account back to England. This led to a formal request for a settlement there from the Secretary of State for Colonies, Earl Bathurst, in March 1826.

The new Governor, Sir Ralph Darling, sent 20 soldiers and 20 convicts to colonise the area on the 9th November 1826, though he was confused by the order after having read many ill reports of the land. He also sent William Hovell along to continue exploration of the region. The HMS Fly sailed into Westernport on the 2nd of December, and a settlement started on the eastern shore near Corinella. The site (which Hovell had to admit was not the same area he had previously explored) soon proved unsuitable, with little fresh water to be found, and shoreline mudflats and mangroves making life no easier for the new settlers. The order to withdraw from the land came in July 1827, and by the end of that year, the colony had ceased to be.

Thus attempts to settle the district the official way (that is, with soldiers and convicts) had failed. Though there had never been civilian interest in the region, this would soon change, as good land was running out in Van Diemens Land and the legal limits of NSW. Of course, new areas had to be tried, as Westernport had proved unfruitful, and Port Phillip Bay did not look promising (as many remembered Collins’s failed colony just inside the bay near Sorrento). The areas to the west of Port Phillip Bay, dubbed the Western District, soon attracted the attention of land-hungry squatters.

The area around Portland Bay had been used by sealers and whalers between April and October each year, and one of these men would later claim to be the founder of Victorian settlement. William Dutton had first landed at the area in December 1828 for a month or two of sealing; he then returned in July, built a hut, and supposedly lived there for 6 months, growing potatoes to add to the diet of his party. Dutton also claimed that he had lived there for over a year starting March 1831, and also between November 1832 and March 1833. Many believe that while his accounts may be true, the honour of being called the founder of settlement in the south belongs to Edward Henty.

A wealthy Sussex farmer, Thomas Henty, had moved his family and interests to New Holland, but had been disenchanted with NSW and Van Diemens Land. One of his seven sons, Edward, had heard rumours from seamen of good land on the south coast of the mainland. In July 1833, Edward Henty paid Hutton a visit at Portland Bay, bought some oil, then returned to tell his father of the rich land he had seen. He took his father there a few months later, and they decided to secure land there as soon as possible.

Another Henty, James, wrote to the Secretary of State for Colonies asking to buy land in the district. Lt-Governor Arthur of Van Diemens Land supported their request, as he wished to extend his authority across Bass Straight. Edward Henty, however, could not wait for a reply, and he landed at Portland on the 19th of November, 1834.

By mid-1836, the colony was thriving, as it had become involved in the whaling industry. In the same year, James Henty went to London to try to buy the land legally, but failed. The first Victorian settlement continued its success regardless, even though its existence was illegal.

The success of the pastoral settlement on the shores of Portland Bay was well received news for many Tasmanians, as Crown land grants ceased the same year in that State. Even though many were willing to pay for their land, there was no more suitable to be bought on the island. The Port Phillip District was once again an option.

Many set sail for Portland and the Western District, though a group of men had their eyes Port Phillip Bay. Tasmanian farmer John Batman sailed the Rebecca into Port Phillip Bay on the 29th of May 1835, with an eye on settlement. He had earlier established the Port Phillip Association in Launceston, and had been waiting for approval to settle there for seven years or so. He and his crew explored the bay, and Batman was very impressed by the land he saw. He made friends with Aborigines he met, giving them presents; this proved useful when later approached by eight hostile warriors, as the locals with Batman calmed the warriors (who were outnumbered anyway).

Batman then made his famous treaty with the Dutigalla Aboriginals for 240,000 hectares of land (from Point Lonsdale to Black Rock), giving them 30 tomahawk axes, 100 knives, 40 blankets, and 200 handkerchiefs, some flour, scissors, ‘looking-glasses’, shirts, and beads (the Crown later refused to see this as a valid purchase). He marked a spot on the Yarra River for settlement, then settled three servants and five Sydney Aboriginals at Indented Head to mark his purchase. He then went back to Launceston to report his findings to the Port Phillip Association and ready them for settlement.

Batman’s servants were surprised a few weeks later by the arrival of a tall white man in kangaroo skins. He was William Buckley, a convict who had escaped Collins’s settlement at Sorrento early in 1804. He had lived with the Aborigines (who thought him to be a reincarnation of one of their elders) for over 30 years, and had even forgotten most of his native tongue. He had since avoided Europeans, for fear of capture, but had come to warn the small party of a planned Aboriginal attack. For this he was pardoned by Governor Arthur, and returned to Tasmania in 1837 (after spending some time as interpreter in the Yarra River area).

Batman, meanwhile, had returned to Launceston to make preparations to move. he also bragged through the town how he had become ‘the largest landholder in the world’, sparking the envy of another farmer whose eyes were set on the region, John Pascoe Fawkner.

Fawkner wanted to head an expedition, but was forced to hand that honour over to Capt. John Lancey because of a court order placed upon himself. On the 16th of August 1835, Fawkner’s expedition sailed the Enterprise through the heads of Port Phillip Bay, eventually finding the Yarra (which they had no idea Batman had already found). They docked the Enterprise there soon after and began unloading stock and building a sod house to store them in. On the 2nd of September, they had a visit from John Wedge, who had previously come over to survey Batman’s new acquisition; he warned them they were on private property, which was the second time they were told as much, as they had encountered a whale boat manned by someone loyal to Batman on their entrance to the bay. Lancey stayed, while Wedge moved the temporary settlement at Indented Head to a choice Yarra site.

Fawkner made it over on the 10th of October and, like Batman before him, tried to name the river after himself, but Wedge had already called it the ‘Yarrow Yarrow’. The term Yarra Yarra (which apparently should be yanna yanna) he later found to mean any waterfall; it was probably used by a native to describe the rocky falls which used to exist at the end of what is now Queen Street (which is the area Batman chose for his home and the future settlement).

In November 1835, Batman returned to Port Phillip Bay with 500 sheep and 50 cattle. He managed to make an agreement with Fawkner, who temporarily moved his settlement to the south bank of the Yarra. Batman then returned to Van Diemens Land for the last time; Port Phillip Association ships made their way to the new settlement after that.

In April 1836, Batman returned, and the township was founded near today’s Queens Bridge; it was named Bearbrass due to a mishearing of the area’s Aboriginal name, Bararing. Other names, such as Batmania and ‘Dutergalla’ (and even occasionally Glenelg) appeared in Launceston papers, but it was generally known as ‘the settlement’ to outsiders.

Fawkner saw himself as the founder of settlement in Port Phillip Bay, and disputed Batman’s treaty with the Aboriginals (Fawkner even eventually disputed that Batman got there before him). Batman had legally bought the land (or so he liked to think), and saw Fawkner as moving in on his property. Within a month, arbitrators had to be appointed to settle their differences, though the two would stay bitter rivals and harass each other for years (Fawkner would continue to berate his rival even after Batman died).

In June 1836, James Simpson was appointed permanent arbitrator, and the Association petitioned Governor Bourke to appoint a magistrate for the region. This, along with other factors, forced the Crown and NSW Government to turn their eyes towards Port Phillip District.