Pre-European Maori settlement in the Marlborough area was concentrated at bay heads in the Sounds and on the Kaikoura coast, but at the time of European occupation the number of Maoris had been greatly reduced by raiding parties from the North Island, and the tribes in possession in the eighteenth century had been virtually wiped out. Economic development in European times has followed a contrasted pattern in each of the four main areas. North of the Wairau River, which forms a remarkably sharp boundary between the dry tussock lands and the damp, forested hill country of the Sounds, development has been spasmodic, patchy, and in part based on impermanent resources. Whaling in Cook Strait in the 1830s gave way to small-boat building in the 1840s. Later there was small-scale gold mining and extensive sawmilling in the valleys, followed by widespread bush burning on the hills and the grazing of Romney sheep. In the past 50 years dairying and intensive fat-lamb rearing have become well established in the valleys, but there has been widespread soil erosion and reversion to scrub and second growth forest on the hills. Recently the Sounds have enjoyed greatly increased popularity as a holiday resort, especially for Christ-church and Wellington people. For example, in Sounds County in 1961 holiday baches outnumbered permanent dwellings by three to two.
The second area, the Wairau Plains, with 65,000 acres of fertile alluvial soil, has always been the economic heart of Marlborough and the largest centre of population. Since the 1860s it has been a stronghold of small- and medium-scale mixed farming. Before 1914 much barley, chaff, and potatoes were exported to the North Island, but in recent decades specialisation has been rather towards peas, lucerne, and grass seed. The third area, Kaikoura coastal plain, repeats some characteristics of the Sounds area: its higher rainfall, former forest cover, and its marine resources. There were whaling stations in the 1840s but agricultural settlement was slow until small swamp and bush sections were broken in by the settlers of Irish origin in the 1870s. Dairying and fat-lamb rearing were firmly established by the turn of the century.
The remaining area of Marlborough – the most characteristic Marlborough – is the vast tussock-covered expanse with low and uncertain rainfall between the Wairau Valley and the Seaward Kaikoura Range. This was the first important area of Merino sheep grazing in New Zealand, and the squatters who occupied it were instrumental in achieving separation from Nelson. Excessive burning and overgrazing by sheep and rabbits have severely denuded many parts of the lower country, while wild goats and deer have seriously damaged the plant cover of the higher country. Towards the coast and in the lower Awatere Valley, the former large freehold runs were subdivided at the turn of the century into small grazing runs and mixed farms. Corriedale sheep supplanted the Merino, and sown grasses and arable crops replaced the tussock. On steeper country Merino and half-bred sheep grazing still holds sway, but the remotest frontiers of sheep farming have retreated. The Molesworth run at the head of the Awatere Valley was abandoned by the lessee in 1938 and has since been managed by the Department of Lands and Survey in New Zealand's most extensive example of land restoration and conservation farming. Following suppression of the rabbit menace, cattle were introduced and there has been extensive aerial reseeding of depleted hillsides.