Since 1878 the Marine Board of South Australia had called for a navigational light on the Neptune Islands, lying south-west of the entrance to Spencer Gulf.  The three barren granite outcrops were surrounded by large breakers. In August 1840 the cutter Francis was wrecked there and the crew subsisted on penguins for 52 days before going for help in a repaired dinghy.

In 1889, trying to avoid the destructive Neptune Island breakers, the sailing vessel Loch Sloy veered too far south and collided with rocks on the west coast of Kangaroo Island. The wreck and loss of all but three crew members prompted an official enquiry into the safety of the passage east. It was the catalyst for the establishment of a light on South Neptune Island.  Eighteen months later, in 1901, the Port Adelaide lighthouse had been relocated and a new lens cast its beam for 28 kilometres across the horizon at the entrance to Spencer Gulf.