It is historically significant since it retains an Aboriginal coastal shell midden, one of the first recorded sea-level benchmarks, and one of the few preserved Australian convict-period burial grounds.

[20] The midden contains shells and the remains of campfires (charcoal and ash), evidence of past aboriginal people visiting the isle to gather shellfish and molluscs such as abalone and mussels.

It was named after Captain John Welsh's sloop Opossum while seeking shelter nearby when surveying the harbours on the Tasman Peninsula.

[23][24][25] Reverend John Allen Manton, an English Wesleyan missionary, arrived in February 1833 as first chaplain for the Port Arthur settlement.

[10] The colony experienced population decline following the closure of Point Puer boys' prison in 1849,[33] the end of convict transportation to Tasmania in 1853,[34] and the departure of the military in 1863.

[38][39] Alfred Mawle, a tour guide for Port Arthur from about 1899 to 1939,[40][41] described that convict graves were marked with small metal numbers, which went missing in the 1920s.

Free people were located on the northern western corner of the island and their graves were generally marked with footstones, headstones and tombstones cut by convict stonemasons.

[56][14] The register shows that in the cemetery's first decade, 90% of burials were convicts and 90% were younger than 40 years old of which 39 were children from Point Puer boys' reformatory prison.

In a diary entry by Lady Jane Franklin, she describes the elder dying while journeying on the government brig, Tamar, on its way to Hobart, and her burial undertaken during the boat's layover at Port Arthur.

[60] In the early years illness such as dysentery, enteritis and fever were the main causes of death followed by respiratory disease and epidemics spreading through the colony.

[62][63] The second was Mark Jeffrey, an English convict who volunteered for the job as gravedigger and lived on the isle from Mondays to Saturdays and returned to the Port Arthur settlement to attend Sunday church services.

One reason for this visit was to establish a permanent sea level benchmark based on tidal observations initiated by Franklin and continued by Thomas James Lempriere, Deputy Assistant Commissary General of Port Arthur.

[69][70] Lempriere had taken on the duties of recording meteorological and tidal observations following the drowning of the Surveyor for the Royal Navy, Lieutenant Thomas Burnett in May 1837.

[73] Captain Ross describes in his book, A Voyage of Discovery and Research in the Southern and Antarctic Regions during the Years 1839–43, that the Isle of the Dead was chosen for the placement of the benchmark as it was near to the tide register.

[78][79] The Isle of the Dead benchmark, including the related surviving records up until 1848, were placed on the Australian National Heritage List in June 2005 for having "exceptional historical and scientific significance in the international field of climate research".

[87][88] His account of his visit titled An Excursion to Port Arthur in 1842 was published in 1853 and describes the isle "picturesquely sorrowful… soothing in its melancholy".

[93] His book titled For the Term of His Natural Life was published in 1872 and reflects his research on convictism from this trip and includes the Isle of the Dead as one of its locations.

Following release from prison on a ticket of leave and due to ill health and poverty he was transferred to the Invalid Depot in Launceston, Tasmania.

[98][99] By the 1890s tourist excursions were being regularly run in summer by steamship companies departing from Hobart, Melbourne and Sydney as land infrastructure was not fully developed.

[85][100] Despite tourism growth to Port Arthur, visits to Isle of the Dead were reduced as it was offshore and required the hiring of a boat.

[14][101] Material remains of historical tourism is evident by a watercolour of Isle of the Dead by Ebenezer Wake Cook, commissioned by the Duke of Edinburgh during his visit to Tasmania in January 1868.

[106] In 1887 Isle of the Dead together with Point Puer were sold as private land to Thomas White as Lot 7378 until acquired by the Tasmanian government in 1915.

[85][122] The National Parks and Wildlife Service (NPWS) took over the management of the isle in 1971 and introduced conservation methods to minimise further erosion by removing exotic species and planting native trees to act as wind breaks to protect the headstones.

[115][116][20] From the 1970s tourism was promoted through "Isle of Dead Tours" facilitated by a new jetty and boat trip on the O'Hara Booth departing from Port Arthur's Mason Cove.

[85][123] This revenue has funded conservation and heritage activities such as: maritime research uncovering artefacts of convict boat transport, old jetty and moorings on the Isle of the Dead's coastline;[124] monitoring headstone deterioration and restorations;[13][125][126] and, geophysical investigations of the layout and physical characteristics of the burial ground.

[85][128] At the same time, funding projects have increased tourist accessibility through building new jetties at Mason Cove and Isle of the Dead and improving walkways and viewing platforms.

[126] PAHSMA, under its conservation aims, succeeded in having Isle of the Dead, as part of the Port Arthur Historic Site, inscribed on the Tasmanian Heritage Register in 1995 and Australian National Heritage List in 2005 for its historic and cultural significance, giving it protection under the Environment and Protection and Biodiversity and Conservation Act 1999.