Before the steam ferry was created, people would cross the harbour in sampans. In 1870, a man named Grant Smith brought a twin-screw wooden-hulled boat from England and started running it across the harbour at irregular intervals.
In July 1873, an attempt was made to run steam ferries between Hong Kong and Kowloon. This was stopped at the time at the request of the British consul in Canton.
The company was founded by Parsee merchant Dorabjee Naorojee Mithaiwala as the "Kowloon Ferry Company" in 1888. Naorojee bought Smith's boat, and later acquired the steam vessels Morning Star and Evening Star from a Mr Buxoo. It is thought that a regular service to the public was established in the mid-to-late 1870s, after the cession of Kowloon to the British in 1860. The popularity of this means of transport enabled him to increase his fleet to four vessels within 10 years: the Morning Star, Evening Star, Rising Star and Guiding Star.Each boat had a capacity of 100 passengers, and the boats averaged 147 crossings each day.He incorporated the business into the "Star Ferry Co Ltd" in 1898, prior to his retirement to India.The company name was inspired by his love of Alfred Lord Tennyson's poem "Crossing the Bar", of which the first line reads "Sunset and evening star, and one clear call for me!".
On his retirement in 1898, Naorojee sold the company to The Hongkong and Kowloon Wharf and Godown Company Limited, at that time owned by Jardine, Matheson & Co. and Sir Paul Chater.
A pier constructed on the western end of Salisbury Road opened in 1906, but was destroyed by a typhoon in September 1906. In the early 1950s, construction of the present twin-piered terminal commenced on both sides of Victoria Harbour, designed to handle 55 million passenger trips a year. The structure was completed in 1957, concurrent with the Edinburgh Place Ferry Pier built on the island side.
At the turn of the century, Hong Kong currency and Canton currency were both accepted as legal tender in Hong Kong. In the autumn of 1912, following a devaluation, the Star Ferry caused a controversy by insisting, together with the tramways, that payment had to be made in Hong Kong currency only. Canton coinage would no longer be accepted.
In 1924 the Yaumati Ferry operated the route to Kowloon in a duopoly.In 1933 the Star Ferry made history by building the Electric Star, the first diesel electric passenger ferry of its kind.
By 1941, the company had six vessels. During the Japanese Occupation of Hong Kong, the competing Yaumati Ferry was allowed to continue, while the Japanese commandeered the Star Ferry for their own purposes. The Golden Star and the Meridian Star were used to transport prisoners of war from Sham Shui Po to Kai Tak. In 1943, the Golden Star was bombed and sunk in the Canton River by the Americans, and the Electric Star was sunk in the harbour. After the war, the ferries were recovered and returned to service.
Until the opening of the Cross Harbour Tunnel in 1972, the Star Ferry remained the main means of public transportation between Hong Kong Island and the Kowloon side.
The Star Ferry operates on a franchise from the Government. It was last renewed in March 1998, the year of its centenary.