Oatlands, on the shores of Lake Dulverton, was named by Governor Macquarie in 1821 on June 3, possibly after its Surrey namesake in England where King George III had a sheep stud.

The first buildings were erected around 1826 and, at Macquarie’s suggestion, were all built of brick and stone.

It was developed as a military base for the control and management of convicts because of its equal distance from Hobart and Launceston. Convicts were assigned to nearby farms and properties, and also worked on public buildings, roads and bridges.

Oatlands is considered to have the largest number of colonial sandstone buildings in any town in Australia, and many of them were built by convict labour. There are 138 sandstone buildings within the town boundaries, 87 of them on High Street, the main street in the town.

The military garrison was established in 1825. The oldest buildings in the town are the Court House and the Callington Mill.

The Callington Mill is a unique wind driven flour mill that was built in 1837 and was a working mill for 41 years, then abandoned, used for water storage, and abandoned once again. In 1909 a storm blew the sails away and in 1912 it was gutted by fire. The mill is slowly being reconstructed to return it to its former glory.

The Oatlands Court House, located on the corner of Campbell Street and The Esplanade, is the oldest building in Oatlands. It was built by convict labour in 1829 and is a fine example of a Georgian public building with 12 pane windows.

It was originally constructed as a combined Chapel and Police Office.

In 1829 the local Police Magistrate, Thomas Anstey, wrote "I think the size of the building is 32 feet by 20 feet. It is constructed of solid masonry and shingled - and I believe it will be the cheapest work of this kind ever performed by Government: it having been erected and covered in by two men wearing their irons the whole time; and who would otherwise have been employed during those three or four months in breaking stones on the road."

St Paul’s Church was designed by Augustus Welby Pugin, the father of Gothic Revival architecture. For some years after 1848, Oatlands was the place of exile of the Irish nationalist leader Kevin Izod O'Doherty, where his stone cottage still stands.

A railway connected Oatlands with Parattah Junction, on the main Hobart to Launceston line. The railway opened on 13th May 1885 and closed on 10th June 1949. The first school in the town opened in 1833 and was known as The Albany Academy. In 1839 there were 30 pupils attending but this number had risen to 40 by 1843 – quite a different story from today.

At last count, the population of Oatlands was 580.