Historically the original harbour was formed by the protection offered by the south coast of England, Chesil Beach and the Isle of Portland. This gave protection from the weather to ships from all directions except the east. King Henry VIII built Portland Castle and Sandsfoot Castle to defend this anchorage.
Construction of the modern harbour began in 1849 when the Royal Navy created a breakwater to the south of the anchorage, made of blocks from local quarries on the Isle of Portland. This was completed in 1872 and created a much larger harbour providing protection from south-easterly winds. The Verne Citadel fort, Nothe Fort, East Weare Battery, High Angle Battery and two forts on the breakwaters were also built, including Portland Breakwater Fort. The detention barracks of East Weare Camp were built above the East Weares Battery circa 1880. The area of quarried stone now features Nicodemus Knob, which is a landmark pillar left as a quarrying relic to mark the extent of how much stone was removed. The nearby Royal Naval Hospital in Castletown served Portland's naval base from the late 19th century until 1957, when the hospital was handed over to the NHS, whilst the now-disused East Weares Rifle Range served the navy and other military soldiers from when it was built by 1903.
In 1906, with the threat of torpedo attack from the eastern side of the anchorage, two more breakwaters were added. A further barrier against submarine attack from the south came in 1914 when the battleship HMS Hood was scuttled across the southern entrance to the 1848 breakwater. Its wreck still remains, although it is deemed too dangerous for divers. In 1905, the breakwater's Portland Breakwater Lighthouse was built, which continues to operate today.
The second of only two Victoria Crosses awarded for action in the United Kingdom was posthumously bestowed on Jack Foreman Mantle, who died at his post on HMS Foylebank during a 1940 air raid on Portland Harbour. Mantle is buried in the Portland Royal Naval Cemetery. Hermann Göring's nephew — Hans-Joachim Göring — was a pilot in the Luftwaffe with III Gruppe./ZG 76, flying the Messerschmitt Bf 110. Hans-Joachim was killed in action on 11 July 1940, when his Bf 110 was shot down by Hawker Hurricanes of No. 78 Squadron RAF. His aircraft crashed into Portland Harbour during an air raid.
The Harbour was sold off by the Royal Navy in 1996 allowing it to be used as both a centre for water sports and as a service facility for Channel shipping. The commercial port is currently operated by Portland Port Ltd and Portland Harbour Authority Limited. Commercial activities on the water include specialist diving services for vessels and repairs & maintenance as well as a bunkering (fuelling) station. The port is used by all nature of vessels from commercial ships such as bulkers, tankers, container carriers car carriers, survey and Reefers etc. to British and foreign naval vessels. Commercial activities on the land of the dock estate include fuel storage, natural gas storage, several engineering facilities and a shell fish specialist.
The Portland Harbour Revision Order 2010 provides for the creation of new berths and hardstand areas at the port in order to allow increased commercial activities over the next 50 years. These new facilities have been identified as part of a master plan and business strategy developed by Portland Port. The development is designed to increase berthing opportunities and provide more operational land.
The four identified areas for development are:
- Britannia Terminal Area
- North of Coaling Pier Island
- Camber Quay Development
- Floating Dry Dock Development at Queen's Pier
The port also sees various cruise ship calls bringing visitors to the Dorset area. The Britannia Cruise Terminal, which was opened in July 1999 and again refurbished in 2005 has seen the likes of Royal Caribbean, Azamara, Club Cruises, Saga and Crystal Cruises use it as a start point for excursions in the wider Dorset region and beyond.
The harbour is a popular location for wind surfing, wreck diving and sailing. Weymouth and Portland National Sailing Academy which hosted sailing events in the 2012 Olympic Games, is located on the south-western shore of the harbour. In October 2007 work commenced on a new marina and recreational boating facility. Some 250,000 tonnes of Portland Stone was used in creating the 875m breakwater and associated reclaimed land. This facility was open by Prince Philip, Duke of Edinburgh in April 2009 and is situated directly adjacent to the National Sailing Academy. Apart from the usual freshwater, fuel, shore power and pump-out facilities the marina also has a bar/restaurant, 15 retail/business units and 5 larger commercial units.
In addition to Hood, there are other dive wrecks around the harbour:
- on the inside of the harbour, against a breakwater:
- Countess of Erme - barge 30 metres north of the Eastern Ship Channel
- the Spaniard - barge 50 metres south-west of the Chequered Fort
- a World War II landing craft and a Bombardon Unit, a harbour device intended for the D-Day beaches in Normandy, 50 metres north east of the curve of the south break water
- in "open" water inside the harbour:
- "Portland’s Geology". JurassicCoastline.com. Retrieved 15 March 2014.
- Dorset; The Royal Navy (illustrated): Stuart Morris, 2011. The Dovecote Press, Wimborne, Dorset: ISBN 978-1-904349-88-4
- Portland, an Illustrated History: Stuart Morris, 1985-2004. The Dovecote Press, Wimborne, Dorset: ISBN 0-946159-34-3
- Portland (Discover Dorset Series) Stuart Morris, 1998. The Dovecote Press, Wimborne, Dorset: ISBN 1-874336-49-0.
- Isle of Portland Railways: Jackson, Brian L., 1999. ISBN 0-85361-540-3
- Portland, Then and Now: Stuart Morris, 2006. The Dovecote Press, Wimborne, Dorset: ISBN 1-904349-48-X.
- Portland Port
- Coxswain Edward Palmer, awarded BEM for rescue work following the sinking of HMS Foylebank in Portland Harbour, July 1940