The Port Arthur penal settlement began life as a small timber station in 1830.
In 1842 a huge flour mill and granary (later the penitentiary) was begun, as well as the construction of a hospital.
1848 saw the first stone laid for the Separate Prison, the completion of which brought about a shift in punishment philosophy from physical to mental punishment.
The punishment drove quite a number of the prisoners insane. Many of them died there. The penal settlement went into a decline after the transportation of convicts ended and the remaining prisoners became too old to maintain the expansive site and run the industrial activities that were conducted there such as timbergetting. It was eventually closed with the land being divided up to be sold off as a new town of Canarvon.
Canarvon didn't really prosper and from around the 1970's onwards the land was reacquired by the government and turned into a tourist attraction.
One of the activities that you can do is a night time ghost tour, with Port Arthur being reputed to be one of the most haunted places in Australia, what with all of the insane, dead convicts and all.
It is one of the ugliest, most beautiful spots in the country, depending upon which way you're looking at it at the particular time.