14 July – The Home Secretary authorises Phillip to make land grants to civil and military officers.
1 November – The Philadelphia becomes the first foreign trading vessel to visit Sydney.
December – d'Entrecasteaux expedition makes land near Cape Leeuwin and explores south coast of Western Australia
10 December – With the colony beginning to flourish, Phillip is granted leave and permitted to return to England. He leaves on the Atlantic, taking Bennelong with him, and retires to a quiet life in Bath. While the British government decides on a replacement, Francis Grose (the commanding officer of the New South Wales Corps) takes control as Acting Governor.
11 December – Francis Grose officially takes up his role as Administrator
24 December – The American ship Hope arrives in Sydney; Grose is forced to buy alcohol to obtain other cargo.