The first European settlements in Marlborough were the shore whaling stations established by Sydney merchants in the 1830s, at Port Underwood and on Queen Charlotte Sound. Little knowledge of the interior was acquired by the whalers whose interests were essentially maritime, and the next European approach was overland from Nelson by way of Tophouse and the head of the Wairau Valley in 1842. In 1841 Tuckett, the New Zealand Company surveyor, in making a reconnaissance of possible sites for the Nelson settlement, had dismissed the Wairau Plains after a cursory offshore inspection. Had he known of the easy route from the head of Queen Charlotte Sound, Nelson might have been located there. In the event, the Wairau was to be settled as an “over-spill” from Nelson – caused not through pressure of population on the resources of the Tasman Bay area, but because those who possessed capital found it more profitable to invest in sheep grazing in the Wairau than in the agricultural development of their 50-acre “suburban” holdings near Nelson.
The impetuous and ill-advised efforts of the New Zealand Company's Nelson leaders to acquire the Wairau Plains as a site for the 150-acre “rural” holdings, led to the disastrous incident known as the Wairau “massacre” (q.v.) of 1843 – the only armed clash between Pakeha and Maori to occur in the South Island. The district was eventually purchased from the Maoris by the Crown in 1847 and added to the Nelson settlement. The pastoral “invasion” began immediately. In August 1847 Frederick Weld landed the first 2,500 sheep at Port Underwood, drove them across the Awatere River, and established at Flaxbourne the first extensive Merino sheep run in the South Island. Within three years the grasslands as far as the Kaikoura Ranges had been occupied by squatters to the accompaniment of those vast tussock fires (the annual “burn off”), which were to precede the Merino sheep everywhere in the South Island in the next decade. Fourteen-year leaseholds at nominal rentals confirmed a mere 50 or so runholders in control of the grassland areas of Marlborough. After Grey's cheap land sales regulations were proclaimed in 1853, large areas of the best pastoral country were made freehold at the minimum price of 5s. per acre. Because of its early start in sheep farming, Marlborough served as the principal “reservoir” of acclimatised Merinos for the stocking of the Amuri, Canterbury, and Otago tussock lands during the 1850s.
Agricultural settlement on the 150-acre freehold sections of the Wairau Plains expanded steadily after 1855 under the stimulus of rising prices for foodstuffs on the Australian goldfields. In 1861, of the overseas-born population of Marlborough, 66 per cent were English, 16 per cent Scottish, and 8 per cent Irish – a proportion almost identical with that of Wellington Province at the same time. In 1864 the Wakamarina Valley, at the head of Pelorus Sound, was briefly rushed by some 3,000 to 4,000 gold miners, but most of them soon passed on to the West Coast. Assisted immigration in the 1870s brought 1,300 people to Marlborough and slightly increased the Irish-born element in the population.
Large-scale sawmilling began in the valleys of the Sounds district in the late sixties, most of the timber being shipped to Wellington and Lyttelton but by the end of the century the timber camps had given way to dairy and sheep farms. Until 1900 close settlement in Marlborough had not spread beyond the very limited areas of the lower Wairau Plains, the valleys of the Sounds, and the Kaikoura Plain. The great estates on the tussock lands remained intact. In no other province of New Zealand did the land subdivision policy of the Liberal Government play such a large proportional role in promoting closer settlement. Between 1895 and 1915 22 estates, comprising a quarter of a million acres, were subdivided into some 540 farms and small grazing runs. The main areas affected were the middle Wairau and the lower Awatere Valleys, the increased settlement being apparent on the population map of 1911.