Less than twenty years after Captain Cook first landed at Botany Bay, Britain established the first permanent European settlement in Australia. The decision to establish a colony was strongly motivated by Joseph Banks. Banks saw that British settlement in Australia could be beneficial, particularly following the loss of the American colonies, where many prisoners had previously been transported, after the American War of Independence. An expedition of eleven ships, known as the 'First Fleet', carrying convicts, stores and settlers, left Portsmouth for Australia in the spring of 1787.

On 18 January 1788, the fleet, led by Arthur Phillip, arrived at Botany Bay, but the swampy land did not live up to the expectations raised by Cook's descriptions from his first voyage and it was decided to venture further into Port Jackson to find a suitable anchorage. On 26 January, they made landfall at Sydney Cove, which was deemed a much better location for a settlement and the Union flag was raised.

It is apparent from this account that Phillip immediately saw the benefits of a permanent settlement in Australia. There are copious references to the medicinal properties of plants found nearby, and remarks on the stability of the climate which he noted was "equal to the finest in Europe."

26 January is now celebrated among many modern Australians as Australia Day and huge parties are held across the country. The arrival of the First Fleet, however, is also regarded among Indigenous communities as an invasion of ancestral land and the anniversary is marked by several groups as a day of mourning for those lost as a result of European settlement.