Watsons Bay is a small harbourside suburb 11 km northeast of Sydney's CBD, at the end of the South Head peninsula. First visited by the First Fleet in January 1788 and later named after harbourmaster Robert Watson, it grew from an isolated fishing village into a ferry-linked retreat from the 1870s. Visitors come for Camp Cove's sheltered swimming, the clothing-optional Lady Bay, and the coastal walk to The Gap, an ocean cliff with sweeping Pacific and harbour views. Doyles on the Beach anchors the waterfront dining scene.
Watsons Bay sits where Sydney Harbour meets the Tasman Sea, on land the Cadigal people knew as Kutti and used for fishing and shellfishing around Camp Cove. The suburb's population grew from three dozen in 1828 to today's roughly 880 residents, and it still holds heritage buildings including St Peter's Church (1864) and the former Macquarie Lighthouse keeper's precinct nearby. The Gap, its best-known landmark, overlooks the site of the 1857 Dunbar shipwreck, marked today by the ship's recovered anchor. The Federation Cliff Walk links Watsons Bay south to Vaucluse and Nielsen Park, and ferries run direct from Circular Quay.