Taiaroa Head Lighthouse is the oldest working lighthouse in the South Island and the second oldest, by 24 hours, still in use in the country. Overall 19 of the original lighthouses in New Zealand are still functioning, although all now are automated. The Taiaroa Head Lighthouse is situated on Taiaroa Head, the seaward headland of the entrance to Otago Harbour. An obvious site for a lighthouse it is also well-known as the only mainland breeding and nesting ground of the Royal Albatross. The headland was once the site of Pukekura Pa, scene of fighting between Ngati Mamoe and Ngai Tahu. It is known as Taiaroa Head after Ngai Tahu leader Te Matenga Taiaroa (?-1863), who, along with other Ngai Tahi warriors, prevented Te Rauparaha (?-1849) and Ngati Toa conquering all of the South Island during the 1830s. Taiaroa was one of the Ngai Tahu leaders who sold the Otago block to the New Zealand Company in 1844, at which time Taiaroa Head was set aside as a lighthouse reserve, although the extent of the reserve was the subject of ongoing debate with a Native Land Court hearing on the matter in May 1868. The following year the lighthouse reserve at Taiaroa Head was gazetted.

In Otago it was obvious from early on that a light was needed to mark the entrance to the harbour. Captain James Cook (1728-1779), for example, did not spot the entrance to the harbour during his eighteenth-century voyages around New Zealand. Although the upper section of the harbour was explored by Pakeha as early as 1826, the problem of finding the entrance to Port Oxley (as it was then known) remained. Ships often tacked back and forth for days before spotting it, even after the Pakeha settlement of the area in 1848. In order to solve this difficulty a flagstaff was erected at Taiaroa Head in 1849. In 1850 a light was added to the flagstaff but this was not often lit because, complained the chief pilot, the government refused to pay for the oil. The increase in numbers of vessels entering the Otago Harbour as a result of the 1860s goldrushes made the need for a lighthouse at the head of the harbour both more obvious and more desirable. The number of vessels entering the harbour rose from 69 in 1860 to 983 in 1863.

The Taiaroa Head Lighthouse is a small stone tower with iron girders providing structural support. A balcony runs around the lighthouse at the third level and the whole is painted white with red trim. Unusually for New Zealand it is built in stone. Although his first two New Zealand lighthouses were stone, Balfour came to favour the erection of timber lighthouses, which could be built more rapidly and the logistics and cost of transporting wood to the typically remote locations were much less than that of iron or stone. However, at Taiaroa Head ‘excellent stone was found close at hand’ and quarried on site. The interior of the lighthouse was lined in kauri. The total height of the lighthouse is around 12 metres (39 feet) and it stands around 60 metres above the sea (196 feet). An adjacent building was erected at the same time to house the lighthouse keepers and their families.