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Construction of the modern Naval Dockyard began in the mid-1740s, on the western side of English Harbour. Enslaved Africans from plantations in the vicinity were sent to work on the dockyard. By 1745 a line of wooden storehouses had been constructed (on the site of the present-day Copper & Lumber Store Hotel), and the reclamation of land to provide adequate wharves was started. Between 1755 and 1765, quarters were built for the Commander-in-Chief on the site of the Officers’ Quarters. Additional storerooms, a kitchen and a shelter for the Commander's “chaise” were also erected. The first part of the present Saw Pit Shed was constructed, the reclamation of the wharves and their facing with wooden piles was continued, and a stone wall was built to enclose the Dockyard.

Between 1773 and 1778, the boundary walls were extended to their present position; the Guard House, the Porter's Lodge, the two Mast Houses, and the Capstan House were built; the first bay of the Canvas, Cordage, and Clothing Store were built; and the first naval hospital was built outside the Dockyard. By 1780, the dockyard also had boathouses, malthouses, a water catchment, and a galley.

Many of the buildings in the Dockyard today were constructed during a building programme undertaken between 1785 and 1794. The Engineer's Offices and Pitch and Tar Store were built in 1788 and the Dockyard wall was extended to enclose the new building. The wharves were improved and the northern side of the Saw Pit Shed was built in the same year. In 1789 the Copper and Lumber Store was completed and by 1792 the west side of the Canvas, Cordage, and Clothing Store had been completed. The Blacksmith's Shop also dates from this period. This building programme overlaps with Nelson's tenure in the Dockyard from 1784 to 1787.

The Sail Loft was built in 1797 adjacent to the Engineer's Offices and Tar and Pitch Store. Around 1806 the Pay Master's Office was built and in 1821 the Officers’ Quarters building was constructed to accommodate the growing numbers of officers who accompanied their ships to the yard. The Naval Officer's and Clerk's House was built in 1855 and is now home to the Dockyard Museum.

In 1889 the Royal Navy abandoned the dockyard, and it fell into decay.