Point Lonsdale was first discovered by European explorers in 1802. It is named after Captain William Lonsdale, the first police Magistrate of Port Phillip.
Point Lonsdale grew as a result of the development of nearby Queenscliff, four miles to the east.
Between 1841 and 1890, over 30 ships are known to have been wrecked in the Point Lonsdale area. One of these was the magnificent four masted barque, the Holyhead. It became quite a local attraction after it wreck on Point Lonsdale Reef in February 1890. As news of the disaster spread, huge crowds gathered at Point Lonsdale and Queenscliff to gaze at the ship with its sails flapping in the wind. In 1883, another four-masted iron barque on its maiden voyage, the George Roper, came to grief on Point Lonsdale Reef as it attempted to navigate the entrance to Port Phillip Bay.
In another case, the Sacramento was destroyed on the night of April 26 1853. There were more than 300 passengers and crew, but luckily they managed to escape minutes before the ship struck Lonsdale Reef. The Sacramento quickly began breaking up, and within a week the hull snapped in two, littering nearby beaches with wreckage.
In April 1803 three convicts escaped from the newly-formed British settlement at Point King which had been established largely to forestall the creation of a French settlement on the mainland. The convicts made their way around to the Bellarine Peninsula but starvation loomed and two of the men vanished while attempting to return. William Buckley (who had been transported to Australia for life in 1802 for being in possession of a roll of purloined cloth) remained on to the western side of the bay where he was discovered by the Wathawurung people who thought he was a reincarnation of a dead tribal chief. He learned their language and customs, married, had a daughter and lived in the Point Lonsdale area until 1835. One of his dwellings is thought to have been this cave.
In 1835 Buckley allegedly overheard the Aborigines plotting to attack a party of whites at Indented Head. He gave himself up to the party of John Wedge who had followed in the wake of John Batman. It was some time before he regained enough English to communicate his experiences. He received a pardon and acted as an intermediary and interpreter between the whites and Aborigines but he was divided in his loyalties and felt he lacked the trust of both sides. Disillusioned he went to Tasmania, obtained employment, married and later received a government pension. He died in Hobart in 1856.