Te Pahi was by 1800 one of the senior chiefs of the north-western Bay of Islands. He was the son of Wharerau, a descendant of the ancient ancestral Ngāti Awa, the original people of the area, and of their Ngāpuhi conquerors, a combination which gave him great mana over the land and its people. He was related to Ngāti Rēhia, and probably to Te Hikutū and Ngāti Rua.
Te Pahi's principal pā was on a small island called Te Puna or Te Pahi's island, situated between Rangihoua Bay and Moturoa. He usually resided at the inlet nearby, but he kept his weapons store and other treasures on Te Puna. In 1805 his closest relatives were living on the island under his brother 'Tiarrah'. Te Pahi had several wives, one of whom he put to death for her venomous tongue, and at least four sons and three or more daughters. He kept one of his daughters confined for several years in a small storehouse on Te Puna; she was a high-born woman reserved for an important marriage alliance. Another daughter, Atahoe, married George Bruce, a European castaway. After a voyage to India he abandoned her (she was then known as Mary Bruce) in Port Jackson (Sydney), New South Wales, where she died in 1810, leaving a daughter in the Female Orphan School. One of Te Pahi's sons, Matara, travelled to England in 1807, where he met George III, and returned to New Zealand in 1809.
In 1805 Te Pahi and four of his sons took passage in a small colonial vessel, the Venus, intending to visit Philip King, lieutenant governor of Norfolk Island; King's reputation for generosity towards the Māori attracted Te Pahi. However, the master of the vessel ill-treated his passengers and threatened to retain Te Pahi's eight-year-old son to pay for their passages. At Norfolk Island the commandant, Captain John Piper, rescued the boy and welcomed the visitors. Hearing that Te Pahi wished to visit King, now governor of New South Wales, Piper helped him to obtain passages to Port Jackson in the Buffalo; the group arrived there on 27 November 1805.
Te Pahi, the first influential Māori leader to visit New South Wales, and the proprietor of a safe anchorage frequented by the colony's whaling ships, was of value to King. With the safety and comfort of European visitors to New Zealand in mind, King spared no effort to convince Te Pahi of the benefits of an association with Europeans. Te Pahi and his sons were guests at Government House during their three month stay. The chief was presented with iron tools, fruit tree seedlings, livestock and many other gifts. He was also given a small prefabricated house to erect in a safe place under his protection, for the use of European visitors to the Bay of Islands. For his part Te Pahi gave the governor a number of fine cloaks and a stone mere.
Te Pahi was keenly interested in a cultural and technological exchange. He suggested that several of his people should visit New South Wales to learn the skills of shepherds (a meeting with the influential sheepbreeder John McArthur probably prompted this interest). He welcomed King's plan to settle an official party of observers for a few months under his protection at Te Puna, a plan which came to nothing when King was replaced by William Bligh. Many European customs and institutions shocked and disgusted Te Pahi; he was horrified by the severity of sentencing in cases of minor theft. He also had scant tolerance for those Aborigines he encountered, and was critical of their mode of (un)dress, their weapons and way of life.
At Port Jackson Te Pahi also met Samuel Marsden, chaplain of New South Wales. He attended church services regularly and had long discussions with Marsden on the subject of religion. Marsden was so impressed with Te Pahi's 'clear, strong and comprehensive mind', and his eagerness to hear about English laws and customs, that he began to plan the establishment of a Church Missionary Society mission under Te Pahi's protection at Te Puna.
To ensure a safe return for Te Pahi and his sons, King put at his disposal the Lady Nelson, which departed on 24 February 1806. Te Pahi and his many acquisitions arrived at Te Puna safely, the prefabricated house was erected, and the Lady Nelson loaded with spars and seed potatoes, then very scarce in Port Jackson. Governor Bligh dispatched further gifts to Te Pahi when opportunity offered, but his intention that the association would soon become a workable alliance was disappointed.
Late in 1809 the Boyd called at Whangaroa to load spars. On the third day of its stay there, the Boyd was taken by Māori and the crew massacred; there were only three or four survivors. The cargo was plundered and the ship burnt to the water-line. Prompted by reports of these events, Alexander Berry, supercargo on the whaling ship City of Edinburgh in the Bay of Islands, set out to investigate. He was accompanied by three boatloads of whalers and Matengaro, a Bay of Islands chief. From the accounts of various informants Berry concluded that Te Pahi was responsible for the massacre. The whalers, too, were inclined to believe in Te Pahi's guilt; Tara, chief at Kororāreka (Russell), the rival anchorage to that of Te Puna, did his best to convince them. In retaliation, although ostensibly to release any further captives, the crews of five whaling ships took Te Pahi's island by force on 26 March 1810. About 60 of his people were killed and his houses and property destroyed. Te Pahi, although wounded, escaped. Within weeks, however, he had died from a wound suffered in fighting between his people and those of Whangaroa, caused by the Boyd affair. By King's estimate he would have been over 50 years of age. Nearly six feet tall, with a full face and thigh tattoo, Te Pahi had been an athletic and commanding figure.
Marsden, convinced by accounts given to him by Ngāpuhi leaders Ruatara and Hongi Hika in 1814, later made great efforts to clear Te Pahi's name. He considered that Te Pahi had been confused with Te Puhi, a chief of the Whangaroa hapu Ngāti Uru; that Te Puhi, in association with his brother Tara or Te Ara (also known as George) and Ngāti Pou people from Whangaroa heads, had taken the Boyd in revenge for the ill treatment of Tara, who had been a member of the Boyd's crew. Both Marsden and Alexander Berry, in separate accounts, agreed that Te Pahi had certainly been present. However, Marsden maintained that Te Pahi had arrived in Whangaroa with a cargo of fish to trade, after the attack on the Boyd had begun; while Berry maintained that he had been there from the outset and had given the signal for the attack. Both accounts agreed that Te Pahi had called down five seamen who had taken refuge in the rigging, and had taken them ashore in his canoe. But Berry alleged that Te Pahi had then ordered them to be killed immediately, while Marsden maintained that local Māori, who had followed Te Pahi's canoe, killed the sailors.
Te Pahi's role in the events will probably remain unclear. More certain is his significance in relations between the Māori people and British colonial officials. Te Pahi so impressed the latter with his keenness for trade and his shrewdness in all respects that, despite the Boyd episode, colonial confidence in the possibility of mutually advantageous relations with Māori was maintained.