[3] In 1938, the Australian Commonwealth Naval Board (ACNB) identified the need for a general purpose 'local defence vessel' capable of both anti-submarine and mine-warfare duties, while easy to construct and operate.

[4][5] The vessel was initially envisaged as having a displacement of approximately 500 tons, a speed of at least 10 knots (19 km/h; 12 mph), and a range of 2,000 nautical miles (3,700 km; 2,300 mi).

[8] The need for locally built 'all-rounder' vessels at the start of World War II saw the "Australian Minesweepers" (designated as such to hide their anti-submarine capability, but popularly referred to as "corvettes") approved in September 1939, with 60 constructed during the course of the war: 36 (including Castlemaine) ordered by the RAN, 20 ordered by the British Admiralty but crewed and commissioned as RAN vessels, and 4 for the Royal Indian Navy.

[2] After repairs, Castlemaine was ordered to Townsville, then assigned to Darwin in October: at both locations the ship was tasked with supporting and supplying Allied guerrilla operations in Timor.

[12] The two corvettes were to arrive two hours later; Kuru would deliver her passengers to Castlemaine, which was to head for Darwin at first opportunity, then shuttle relief troops aboard Armidale to shore while evacuating the soldiers.

[2][12] Delays from the evasive course and two air attacks meant the corvettes reached Betano Bay after 02:30 on 1 December, with no sign of Kuru, and retreated to sea.

[2] She was immobilised at HMAS Cerberus at Crib Point in Victoria as a training hulk for Engine Room Artificers,[2] who ran the boilers in part providing steam heating throughout the base.

[2] Transferred into Trust ownership by the end of 1973,[2] minus most of the original fittings,[citation needed] Castlemaine was restored and converted into a museum ship.

The ship is not capable of sailing, as the main mess deck houses a museum, and the engines have been converted to run on compressed air, displaying their mechanical operation to visitors.