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© The National Archives of Australia

It is believed that Grafton and the area along the 'Big River' was first spotted by escaped convicts from Sydney's Moreton Bay during the early 1830s given that one of the men, Richard Craig, reported the land of the big river and the surrounding timber forests after the party arrived in Port Macquarie. Granted an official pardon, Craig was sent to set up a timber industry along the river in the late 1840s signalling the beginnings of the primary industry for early Grafton and surrounds.

After settlement of the Clarence region, Grafton was one of the first towns established on the Clarence River in 1849 and the area which was then known as 'The Settlement' was the town base for the initial industry of timber getters and farming such as sugar cane and dairies. When gold was discovered in the upper Clarence River in the 1850s, Grafton's central location had it become a popular base for the visiting gold miners.

Known as the Jacaranda city due to the proliferation of the pretty purple blooming trees in the city which were planted by seed merchant Mr H. A. Volkers in 1879 by direction of the council. In keeping with this tradition, Grafton now hosts a Jacaranda Festival on the last Sunday of October every year. Started in 1935, the festival crowns a Jacaranda Queen and culminates in a grand street parade down the town's aptly named Jacaranda Avenue.

Today Grafton is primarily a residential city, and whilst the surrounding land of Grafton city is still concerned with dairies, and cattle farming and agricultural fisheries continue trade from the Clarence River, the Grafton Correctional Facility and the flourishing retail businesses in the city account for significant employment in the town Grafton.