It was initially installed on a shallow shoal, Seven Foot Knoll, at the mouth of the Patapsco River. The northern reach of this river is the Baltimore Harbor, where the now-decommissioned lighthouse has been placed as a museum. In 1997 the lighthouse was transferred to the Baltimore Maritime Museum where it is located today.
Constructed of 1-inch (25 mm) rolled iron, the lighthouse consists of three main sections. The gallery deck was located 9 feet (2.7 m) above the average high tide waters. The house was the second section, sitting directly atop the gallery deck. This is where the keeper and his family would live. Atop the housing area was the third section of the lighthouse, the light beacon. A 4th order Fresnel lens was housed in the small light compartment. It was visible for 12 nmi (22 km; 14 mi).
The first requests for a light came in 1848, with initial appropriations in 1851. Delays in planning and bidding pushed the start of construction to 1854. Total construction costs came to $43,000 by its completion the following year. Most parts were fabricated in Baltimore at the Murray and Hazelhurst iron foundry. The parts were then shipped to Seven Foot Knoll by boat where they were assembled atop of the screw piles. In 1875 the original house was replaced with the current cylindrical structure made of wrought iron plates. Ice, the perennial threat to screw-pile structures, caused damage in 1884 and 1894, leading to the piling of 790 cubic yards (600 m3) of riprap around the piles.
The light was automated in 1949, and fell into disrepair, eventually being supplanted by the usual skeleton tower. In 1988, the lighthouse was removed from Seven Foot Knoll, carried by barge, and placed ashore in Baltimore's Inner Harbor where it was donated to the city. On August 22, 1989 the lighthouse was listed on the National Register of Historic Places. Aided by the Lady Maryland Foundation, many members of the Steinhice family descendants worked to restore the structure prior to its re-opening.
A light-keeper and his family would have stayed on the lighthouse year-round with 8 days off per month. Probably the most famous of the lighthouse keepers was also the last one, Thomas Jefferson Steinhice (also spelled Steinhise and Steinheiss on various family documents). Steinhice, who was tending the lighthouse with his son Earl, rescued 5 men from their tugboat which had broken down on August 21, 1933. The 90 mph (145 km/h) winds and 15-foot (4.6 m)) seas had rendered the tug inoperable. Steinhice took the lighthouse's small motorboat and made his way out in the direction of the tug's distress whistle. He was awarded the Silver Lifesaving Medal for his actions in saving the lives of the stranded crew.