In 1909 the Chief Protector of Aborigines visited the island, apparently to check on the activities of Japanese pearling crews in the area, and reported the existence of a small camp of Aboriginal people.
In 1916 he found that Palm "suitable for use as a penitentiary" for "individuals we desire to punish".

On 10 March 1918, the Hull River Aboriginal Settlement on the Hull River near Mission Beach on the Australian mainland was destroyed by a cyclone.
Palm Island had been gazetted as an Aboriginal reserve on 20 June 1914, although at the time there were few Aboriginal people living on Great Palm.
After the cyclone, the residents of Hull River were relocated to Palm Island, with the new population from various Aboriginal peoples – from at least 57 different language groups throughout Queensland and the Torres Strait Islands – later referred to as the Bwgcolman people.

In the first two decades of its establishment the population of Indigenous "inmates" increased from 200 to 1,630.
By the early 1920s, Palm Island had become the largest Aboriginal reserve in Queensland and quickly gained a reputation among Aboriginal people as a penal settlement.
Indigenous people were removed from across Queensland as punishment for a variety of infringements, including being "half-caste", and sent to Palm Island.
New arrivals came after being sentenced by a court or released from prison, or they were sent by administrators of other missions and reserves.

On 3 February 1930, in an incident known as the 1930 Palm Island Tragedy, the first Superintendent of the Settlement, Robert Henry Curry, who had been a strict disciplinarian, shot and wounded two people, and set fire to several buildings, killing his two children.
Later in the day, the Superintendent was shot dead.
An official inquiry by the Queensland Attorney General followed.
Those involved in the shooting of the Superintendent, including the Deputy Superintendent and the Palm Island Medical Officer, were charged with murder, but the Crown Prosecutor was directed by the trial judge to drop the charges, stating that the shooting was justified.

A bell tower was built to dictate the running of the mission.
The bell would ring each morning at eight, a signal for everyone to line up for parade in the mission square.
Those who failed to line up had their food allocation cut.
 At nine each evening the bell would ring again, signalling the shutting down of the island's electricity.
The bell tower still stands in the local square to this day, a relic of Palm Island's history.

After 12 Oct 1939, when the Aboriginals Preservation and Protection Act 1939 and Torres Strait Islander Act 1939 were passed, the name changed from Palm Island Aboriginal Settlement to Director of Native Affairs Office, Palm Island.
These Acts effected a change in policy: instead of protection and segregation of Indigenous people, it instead focussed on assimilation into the "white community".
They gave freedom and full citizenship rights to Aboriginal people who qualified for these, but also streamlined the administration and development of Aboriginal reserves.
The Director of Native Affairs Office was superseded by the Aboriginal and Island Affairs Department on 28 April 1966.
The functions were transferred to the Aboriginal and Island Affairs Department, District Office, Palm Island.

Palm Island Aboriginal Settlement was mentioned in the Bringing Them Home Report (1997) as an institution that housed children removed from their families, part of the Stolen Generation.
In 1909 the Chief Protector of Aborigines visited the island, apparently to check on the activities of Japanese pearling crews in the area, and reported the existence of a small camp of Aboriginal people. In 1916 he found that Palm "suitable for use as a penitentiary" for "individuals we desire to punish".
On 10 March 1918, the Hull River Aboriginal Settlement on the Hull River near Mission Beach on the Australian mainland was destroyed by a cyclone. Palm Island had been gazetted as an Aboriginal reserve on 20 June 1914, although at the time there were few Aboriginal people living on Great Palm. After the cyclone, the residents of Hull River were relocated to Palm Island, with the new population from various Aboriginal peoples – from at least 57 different language groups throughout Queensland and the Torres Strait Islands – later referred to as the Bwgcolman people.
In the first two decades of its establishment the population of Indigenous "inmates" increased from 200 to 1,630. By the early 1920s, Palm Island had become the largest Aboriginal reserve in Queensland and quickly gained a reputation among Aboriginal people as a penal settlement. Indigenous people were removed from across Queensland as punishment for a variety of infringements, including being "half-caste", and sent to Palm Island. New arrivals came after being sentenced by a court or released from prison, or they were sent by administrators of other missions and reserves.
On 3 February 1930, in an incident known as the 1930 Palm Island Tragedy, the first Superintendent of the Settlement, Robert Henry Curry, who had been a strict disciplinarian, shot and wounded two people, and set fire to several buildings, killing his two children. Later in the day, the Superintendent was shot dead. An official inquiry by the Queensland Attorney General followed. Those involved in the shooting of the Superintendent, including the Deputy Superintendent and the Palm Island Medical Officer, were charged with murder, but the Crown Prosecutor was directed by the trial judge to drop the charges, stating that the shooting was justified.
A bell tower was built to dictate the running of the mission. The bell would ring each morning at eight, a signal for everyone to line up for parade in the mission square. Those who failed to line up had their food allocation cut.  At nine each evening the bell would ring again, signalling the shutting down of the island's electricity. The bell tower still stands in the local square to this day, a relic of Palm Island's history.
After 12 Oct 1939, when the Aboriginals Preservation and Protection Act 1939 and Torres Strait Islander Act 1939 were passed, the name changed from Palm Island Aboriginal Settlement to Director of Native Affairs Office, Palm Island. These Acts effected a change in policy: instead of protection and segregation of Indigenous people, it instead focussed on assimilation into the "white community". They gave freedom and full citizenship rights to Aboriginal people who qualified for these, but also streamlined the administration and development of Aboriginal reserves. The Director of Native Affairs Office was superseded by the Aboriginal and Island Affairs Department on 28 April 1966. The functions were transferred to the Aboriginal and Island Affairs Department, District Office, Palm Island.
Palm Island Aboriginal Settlement was mentioned in the Bringing Them Home Report (1997) as an institution that housed children removed from their families, part of the Stolen Generation.
Great Palm Island