Land for the construction of Larnach Castle was purchased in 1870,[5] and prominent Dunedin architect R.A. Lawson was selected to design the Gothic Revival mansion.

To level the construction site, workers jammed pegs into the layers of volcanic rock before pouring cold salt water to split the surface.

In 1875, twenty tonne of glass was imported from Venice, in an effort to enclose exposed verandahs unsuitable for Dunedin winters.

[8] The addition of the 3000 square foot ballroom[6] was completed in 1887[9] as a 21st birthday present for Larnach's eldest daughter Kate.

[7] The building, which Larnach himself simply called "The Camp", was coined a "castle" by local press on 8 December 1874, a few days after William and wife Eliza moved in.

[6] Larnach Castle has a reputation as one of New Zealand's most haunted buildings, with accounts of sightings of the ghost of a bearded Victorian gentleman (presumably Larnach himself), unexplained smells of cigar smoke and port in unoccupied rooms, and visitors and workers at the castle feeling as if they have been suddenly pushed in the back.

[15] Larnach Castle operates as a significant tourist attraction in Dunedin, receiving approximately 120,000 guests per annum.

[14] The castle is open to the public 365 days a year; offering guided and self-guided tours, events and accommodation.