Watsons Bay is a harbourside, eastern suburb of Sydney, in the state of New South Wales, Australia.

Watsons Bay is located 11 km north-east of the Sydney central business district, in the local government area of the Municipality of Woollahra.

This indigenous group of people fished and collected shellfish in the waters and bays off South Head.

[2] The first Europeans arrived at the location on 21 January 1788 as the First Fleet landed and stayed overnight on Camp Cove.

[3] The first grant of 20 acres (81,000 m2) was made to Edward Laing in 1793 in the Camp Cove Area.

Early homes were built for government and military officials working at the local installations.

[4] Watson was appointed harbour pilot and harbourmaster of the port of Sydney in 1811 and the first superintendent of Macquarie Lighthouse in 1816.

[5] Watsons Bay remained an isolated fishing village until development began in the 1860s.

[7] The Dunbar was wrecked near the entrance to Sydney Harbour, Australia in 1857 with the loss of 121 lives.

The wreck of the Dunbar ranks as one of Australia's worst maritime disasters, with the event still retained in the social history of Sydney and NSW.

In 1910, at Jacob’s Ladder, the anchor from the ship was recovered along with other relics and were placed in a museum behind the old Town Hall in Military Road by Vaucluse Council.

[10] The line from the city commenced with a loop at the corner of Erskine and Day Streets near Wynyard station.

The line had its own depot and city terminus and operated independently, although it was connected to the main Sydney tram network.

The coastal walk with ocean views of the Gap along South Head make Watsons Bay a popular tourist attraction in Sydney.