Auckland, was first settled by Maori people around 1350. The region was valued for its rich and fertile land. Maori constructed terraced fortified villages on the volcanic peaks. The isthmus, around 8 kilometres wide with Mount Eden and One Tree Hill at its narrowest point, led to the area having great strategic qualities. The isthmus also has the highly productive soils providing agricultural opportunities, and the two harbours providing diverse seafood.

In February 1840 the new Governor of New Zealand, William Hobson, had the task of choosing a capital for the colony. At this time, the main European settlements were in the Bay of Islands. However, the Bay of Islands' geographical position made it very remote, inaccessible and off-centre from the rest of the New Zealand archipelago. The first and most obvious choice for an administrative capital was Port Nicholson. Centrally situated at the south of the North Island, close to the South Island and growing fast, it had a lot to commend it. But the New Zealand Company and the Wakefield brothers had founded and continued to dominate Port Nicholson. Furthermore, it already had a bad reputation with the Maori for unscrupulous or even illegal occupation of land.
On the initial recommendation of the missionary Henry Williams, supported by the Surveyor General, Felton Mathew, and the offer of land from Ngati Whatua, Hobson selected the south side of Waitemata Harbour as his future capital.

The first European settlers in Auckland, William Brown and John Logan Campbell, had arrived a month earlier on a hunch about Hobson’s intentions and bought Brown’s island. Soon after Hobson founded Auckland, they built the city’s first house, Acacia cottage, which can still be seen on the side of One Tree Hill, in the park that Campbell donated to the city in his old age.

Initially settlers from New South Wales predominated, but the first immigrant ships sailing directly from Britain started to arrive as early as 1842. From early times the eastern side of the settlement remained reserved for government officials while mechanics and artisans, the so-called "unofficial" settlers, congregated on the western side, in areas like Freemans Bay. This social division still persists somewhat in modern Auckland, with the eastern suburbs generally being more upscale.

Auckland was the seat of Auckland Province from 1853 until the abolition of provinces in 1876.

Eventually in 1865, Port Nicholson became the capital and, now known as Wellington, remains so today. The advantages of a central position became even more obvious as the South Island grew in prosperity with the discovery of gold in Otago, and with the development of sheep farming and refrigeration, especially refrigerated ships which allowed chilled meat to be safely shipped to Britain. Parliament met for the first time in Wellington in 1862. In 1868 Government House moved there too.