He transferred to the New South Wales Corps in October 1789 and arrived in Sydney on the Second Fleet ship Scarborough in June 1790.
Townson spent most of his military service in the colony at Norfolk Island where he was stationed for six years and received a twenty-acre (81,000 m2) lease.
During his regime, the only ship built on the island, the sloop Norfolk, used by Matthew Flinders to circumnavigate Van Diemen's Land, was constructed in 1798.
Townson left Norfolk Island in 1800 and returned to England, where through illness he retired and sold his commission in July 1803.
He was generally well liked by his contemporaries but ill-health and deafness led him to avoid public life, and earned him a reputation in his later years "of being unsettled and querulous."