Newcastle was created in 1859 from part of North Eastern Boroughs. It gained a second member in 1880 and a third member in 1889. With the abolition of multi-member electorates in 1894, it was divided into Newcastle East, Newcastle West, Kahibah, Waratah and Wickham. Newcastle East and Newcastle West were abolished in 1904, with the reduction in the size of Parliament and Newcastle was recreated. With the introduction of proportional representation in 1920, it absorbed Kahibah, Wallsend and Wickham and elected five members. With the end of proportional representation in 1927, Newcastle was split into the single-member electorates of Newcastle, Hamilton, Kahibah and Wallsend. It has since been usually held by the Australian Labor Party
In early 2007, sitting member Bryce Gaudry failed to gain the preselection from the Labor Party, which instead chose a former local newsreader, Jodi McKay. Gaudry opted to stand as an independent and as a consequence split the Labor Party's vote. Independent former Lord Mayor of Newcastle John Tate came close to winning the seat after preferences but McKay managed to hold on. Labor's previous margin of over 15% had been slashed to as little as 1.4%, making it one of Labor's most marginal seats.
At the New South Wales state election, 2011, the Liberals' Tim Owen defeated incumbent and one-term member as well as minister Jodi McKay and popular Independent John Tate, marking the first time in history the Liberals had won Newcastle, and made gains in what was previously Labor heartland.