The history of European settlement in Sutherland Shire began with Lieutenant James Cook's historic landing at Botany Bay on April 29, 1770. During his brief exploration around the Kurnell Peninsula, Cook and his crew encountered the natural beauty of the area but also faced tragedy, as a Scottish seaman named Forbes Sutherland succumbed to tuberculosis. In honor of Sutherland, Cook named the northwest point of the peninsula Point Sutherland.

In the aftermath of the American Revolutionary War, the British government sought new locations for transporting convicts, leading to the decision to establish a penal settlement in Botany Bay. On January 18, 1788, the First Fleet, led by Governor Arthur Phillip, anchored off Kurnell. However, after sending a party to prepare the land for settlement, Phillip quickly realized the site was inadequate due to a lack of ship shelter, insufficient water supplies, and poor soil quality. Subsequently, on January 24, two French ships were spotted off the coast, prompting Phillip to raise the English flag near Sutherland Point. He then sailed north to explore Port Jackson, ultimately deciding on Sydney Cove as the location for the settlement.

The first recorded landowner in the Sutherland Shire was James Birnie, a mercantile trader who was granted 700 acres (280 hectares) at Kurnell in 1815. Following official surveying, much of what constitutes modern Sutherland Shire was proclaimed as the Hundred of Woronora by Governor Richard Bourke in 1835. However, land titles were not issued by the Crown until 1856, resulting in minimal settlement during this period. The primary industry was timber cutting, supplemented by shell gathering in the Port Hacking area.

The opening of Crown Lands sales marked a turning point for the Sutherland Shire. Thomas Holt, an influential figure, acquired 12,000 acres (4,900 hectares) and initiated various developmental projects, including oyster farms, cattle grazing, and coal mining. However, it was Holt's timber leases that proved to be the most lucrative. He constructed an impressive manor called Sutherland House on the foreshores of Sylvania, modeled on English feudal architecture. The influence of Holt's extensive 99-year leases significantly hindered development in the Sutherland Shire well into the 20th century.

The European settlement of Sutherland Shire thus set the stage for the region's transformation, with its rich history paving the way for the vibrant community that exists today.