Milton, as a town, was founded in the middle of the 18th Century. The coastal area of New South Wales, Australia in the Milton/Ulladulla/Mollymook area was seen by Captain James Cook in 1770 when sailing north along the east coast of Australia. He did note the Pigeon House Mountain in the distance.

The Reverend Thomas Kendall was the first European settler to the area when he started cutting cedar at Narrawallee Creek near Milton.

Milton, as a town, is classified with the Australian National Trust. This is because of the number of homes and buildings in the town that were built from 1870 onwards.

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