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Manly was one of the first areas in Sydney explored by Sydney's first governor Arthur Phillip after he arrived with the First Fleet in 1788. He was said to be so impressed by the assured and 'manly' disposition of the Indigenous people that met him when he arrived by boat, he dubbed the area Manly Cove. Despite early maps showing Manly as a potential township, the area's remoteness and the fact it was only easily accessible from Sydney by boat meant those choosing to settle in Manly were scarce.

Entrepreneurial Englishman Henry Gilbert Smith saw the potential for Manly to be something of a waterside playground for Sydneysiders, much as Brighton was in England for Londoners and began successfully applying for land grants in the area in the 1850s. With the notion that this area was to be the resort town of colonial Sydney, Smith spent the following decade setting up the fledgling town. He built a pier and bought a steamer which would service the route between Circular Quay and Manly wharf specifically, commissioned the now trademark Norfolk Island Pines to be planted along the coastline, had the Manly Pier Inn built and cleared the land, The Corso, to link the ocean beach with the pier.

Despite the holiday associations of the colonies beachside getaway, its distance from the Sydney colony and ocean frontage had the nation’s first quarantine station set up on Manly's North Heads in 1835. The centre continued to operate as a quarantine station for all international visitors entering New South Wales until the 1980s, however from the 1940s as worldwide immunisation increased and the rate of infectious diseases decreased, the importance of the station to the welfare of Sydney was diminished. In 1984 the station was retired and the area was included within the boundaries of Sydney National Park with the heritage value of its buildings recognised. Today, the main buildings with their spectacular uninterrupted views of Sydney harbour are a favourite with visiting tourists and wedding parties, including the wedding between Nicole Kidman and Keith Urban.

With no more than a kilometre of land between the sea and the suburb's boundaries, there is a thriving beachside retail and service centre in the Manly Corso amongst well-kept and often expensive residential buildings. The ferry service between Circular Quay and Manly wharf remains as the most convenient mode of transport between the city and the northern suburb, and the famed Manly Beach continues to be a popular holiday and day-trip destination in Sydney for domestic and international tourists alike.