The town is located on the Mid North Coast of New South Wales, Australia, about 390 km north of Sydney, and 570 km south of Brisbane. It is located on the coast, at the mouth of the Hastings River, and at the eastern end of the Oxley Highway (B56). The town with its suburbs had a population of 41,491 in 2011, while the population of the local government area was 72,696. It is also on the same latitude as Cobar, but because it is situated on the coast it has a humid subtropical climate, and is widely regarded as one of the most liveable towns in Australia.

Port Macquarie was established in 1821 after John Oxley in October 1818 followed the Hastings River from the mountains and came across this idyllic port which he proclaimed to be a “paradise of great significance and potential”.

Port Macquarie was initially used as a place of secondary punishment, to receive convicts who had transgressed the law a second time after transportation to the Colony. Port's convict population peaked in 1825, but was then progressively run down until 1830 when the Hastings Valley was opened up to free settlement. The convicts were subsequently sent to Norfolk Island or Moreton Bay (now known as Brisbane.)

When free settlement commenced the remaining convicts were assigned to free settlers as a cheap source of labour. By 1847, Port Macquarie was no longer a penal settlement.

The settlement grew rapidly with the arrival of the free settlers; taking up land, building houses and stocking their properties. Timber mills sprung all over the district and the Port Macquarie wharf was expanded to cater for the increased shipping to take timber and farm produce to Sydney.

In 1887 Local Government was formed in the town as Port Macquarie Municipal Council.