Cockatoo Island was largely undisturbed until 1839 when Governer Gipps chose it for the site of a new penal establishment to alleviate overcrowding on Norfolk Island. Convicts were put to work initially quarrying stone for various projects around the colony. They also built stone prison barracks, a military guardhouse, granary silos, official residences and commenced work in 1847 on the Fitzroy Dock which took ten years to complete, all now part of the island’s heritage.
Escape from Cockatoo Island was rare, not least because few prisoners could swim. Supposedly shark-infested waters around the island also tested the resolve of those bent on escape. But amongst the few that did, Frederick Ward managed it. In 1856 Fred Ward was sentenced to seven years on Cockatoo Island for stealing horses. In September 1863 Mary Bugg, his devoted part-Aboriginal wife, took the risk and swam to the island and left him the tools he needed to break free. Two nights later Ward and his mate Fred Britten made a swim for it. Britten drowned, but Mary was right there on the shore waiting for Fred Ward, along with a fast, white steed, right beside where the Dawn Fraser Pool is now. Fred and Mary got away, and galloped off into the sunrise. As the bushranger Thunderbolt, Ward menaced northern New South Wales until shot by police at Uralla in 1870.
The prisoner's accommodation was appalling. In 1869 the settlement was closed and the prisoners transferred to Darlinghurst Gaol, which marked the close of the island’s convict period. The prison complex on Cockatoo Island was soon put to other uses; an industrial school for girls and a separate reformatory. In 1888, the girls moved to Parramatta and the old penal settlement reverted to a goal to ease the crowded conditions at Darlinghurst Gaol. When the prison finally closed in 1908, it marked the end of an era.
In 2010 Cockatoo Island, together with 10 other historic convict sites in Australia, was inscribed on the UNESCO World Heritage List.