Taiaroa Head Lighthouse is the oldest working lighthouse in the South Island and the second oldest, by 24 hours, still in use in the country. Overall 19 of the original lighthouses in New Zealand are still functioning, although all now are automated. The Taiaroa Head Lighthouse is situated on Taiaroa Head, the seaward headland of the entrance to Otago Harbour. An obvious site for a lighthouse it is also well-known as the only mainland breeding and nesting ground of the Royal Albatross. The headland was once the site of Pukekura Pa, scene of fighting between Ngati Mamoe and Ngai Tahu. It is known as Taiaroa Head after Ngai Tahu leader Te Matenga Taiaroa (?-1863), who, along with other Ngai Tahi warriors, prevented Te Rauparaha (?-1849) and Ngati Toa conquering all of the South Island during the 1830s. Taiaroa was one of the Ngai Tahu leaders who sold the Otago block to the New Zealand Company in 1844, at which time Taiaroa Head was set aside as a lighthouse reserve, although the extent of the reserve was the subject of ongoing debate with a Native Land Court hearing on the matter in May 1868. The following year the lighthouse reserve at Taiaroa Head was gazetted.

Lighthouses were a powerful symbol of safety, progess and settlement for a small island colony like New Zealand. Particularly in the early days of Pakeha settlement, the quickest way of travelling around the country was by sea. This was not necessarily safe, however, with over 1000 shipwrecks in the first 50 years of Pakeha settlement. Navigational safety and the construction of lighthouses became a priority for the government. The first permanent lighthouse was erected at Pencarrow Head, Wellington in 1858 and another followed in Nelson.

In Otago it was obvious from early on that a light was needed to mark the entrance to the harbour. Captain James Cook (1728-1779), for example, did not spot the entrance to the harbour during his eighteenth-century voyages around New Zealand. Although the upper section of the harbour was explored by Pakeha as early as 1826, the problem of finding the entrance to Port Oxley (as it was then known) remained. Ships often tacked back and forth for days before spotting it, even after the Pakeha settlement of the area in 1848. In order to solve this difficulty a flagstaff was erected at Taiaroa Head in 1849. In 1850 a light was added to the flagstaff but this was not often lit because, complained the chief pilot, the government refused to pay for the oil. The increase in numbers of vessels entering the Otago Harbour as a result of the 1860s goldrushes made the need for a lighthouse at the head of the harbour both more obvious and more desirable. The number of vessels entering the harbour rose from 69 in 1860 to 983 in 1863.

Serious discussions about building a lighthouse began in 1861, followed by a report from the harbourmaster in 1862 which implored the Otago Provincial Council not to close without having set aside a sum for the construction of a lighthouse. J.M. Balfour (1831-1869), a Scottish engineer appointed to the position of Marine Engineer to the Otago Provincial Government, arrived at the end of 1863 to find the erection of the Taiaroa Head Lighthouse one of his first priorities. In 1864 a contract was let to Dunedin builder Hugh Calder for a lighthouse and a double dwelling. The total cost for lighthouse and houses was over £4,900 and the lighthouse was first lit on 2 January 1865, 24 hours after the one at Tiritiri. By that stage the Marine Board of New Zealand (known as the Marine Department from 1866) had been established and it took control of all lighthouses. It also appointed Balfour as Marine Engineer and Inspector of Steamers in 1866.

Balfour is particularly remembered for his contribution to New Zealand's lighthouse system. He designed many of the early lighthouses, including the ones at Dog Island (1865), Farewell Spit (1870), Nugget Point (1870), Cape Campbell (1870), Ponui Passage (1871), Bean Rock (1872), and Cape Saunders (1880). A previous employee of the noted Scottish engineering firm, Stevensons, Balfour was instrumental in setting up the New Zealand lighthouse system along the lines of the Scottish one, and in encouraging the use of Stevensons' optics and lamps by the Marine Department. Although he drowned at the age of 38, he is remembered in engineering histories as being one of a number of outstanding engineers who furthered the development of New Zealand.

The Taiaroa Head Lighthouse is a small stone tower with iron girders providing structural support. A balcony runs around the lighthouse at the third level and the whole is painted white with red trim. Unusually for New Zealand it is built in stone. Although his first two New Zealand lighthouses were stone, Balfour came to favour the erection of timber lighthouses, which could be built more rapidly and the logistics and cost of transporting wood to the typically remote locations were much less than that of iron or stone. However, at Taiaroa Head 'excellent stone was found close at hand' and quarried on site. The interior of the lighthouse was lined in kauri. The total height of the lighthouse is around 12 metres (39 feet) and it stands around 60 metres above the sea (196 feet). An adjacent building was erected at the same time to house the lighthouse keepers and their families.

The light and apparatus installed at Taiaroa was of a type not used before in a lighthouse anywhere in the world, according to Balfour's 1865 report to the government. A third order fixed dioptric light (see below), it was enhanced by two factors; first the use of inclined frames, which improved the distribution of light, an improvement invented by Alan Stevenson, one of the brothers involved in the Stevensons engineering firm, Balfour's former employers. Secondly, the inclusion of a 'dioptric spherical mirror' reflected the light that would otherwise be wasted on the landward side back through a series of prisms and seaward. This 'mirror' had been invented a few years earlier by Thomas Stevenson, another of the Stevenson engineers, and a small working model had been exhibited in London in 1862. The use of it at Taiaroa was reputedly the first use of this type of optic in the world, and another, of the first order, had been acquired for the proposed lighthouse at Cape Saunders. In order to distinguish the light at Taiaroa from that at Cape Saunders, the one at Taiaroa had red glass installed to provide a red light. This lessened the distance the light could be seen from, but it was felt preferable for safety reasons.

By the 1890s there was a substantial settlement at Taiaroa Head, comprising of the lighthouse keepers and their families, signal station staff, captain and crew of the pilot launch, a small Army contingent (established during the Russian scare of the 1880s) and warders and prisoners from the prison constructed there in the 1870s. This population provided enough children for the Education Board to establish a local school. The field of fire of the Armstrong Disappearing Gun installed during the 1880s passed very close to the lighthouse and the firing of the gun is reported to have cracked panes in the lighthouse lantern.

In 1921 the light changed to an automated acetone one. As a consequence the live-in keepers were withdrawn by the Marine Department and the lighthouse was monitored by the signal station staff of the Otago Harbour Board. The lighthouse reserve and neighbouring land was declared a sanctuary for the royal albatrosses under the Animals Protection and Game Act (1921-1922) after 1938. In 1954 the light was changed from gas to electric. In December 1976 the Taiaroa Heads Lighthouse was placed under the Otago Harbour Board and passed onto Port Otago Limited in 1989.

The Taiaroa Head Lighthouse stands as an important reminder of those days when maritime travel was vital to Pakeha settlement in Otago and to the country as a whole. It also reminds us of the immense difficultly of finding and entering Otago Harbour. It has been continually used as a lighthouse since 1865 and is the second oldest still in use in the country. An unusual example of a stone lighthouse in New Zealand, it stands as an example of the contribution to marine engineering of notable nineteenth century engineers - both Balfour and the Scottish engineering firm (and family), the Stevensons. Automated since 1921, it is a significant landmark at the head of the Otago Harbour.