Colloquially known as The Cross, the area is known as Sydney's red-light district, and is reputed to be home to organised crime groups. Once known for its music halls and grand theatres, it was rapidly transformed after World War II by the influx of troops returning and visiting from the nearby Garden Island naval base. Today, it is dominated by bars, restaurants and nightclubs.
The traditional owners of the land were the Cadigal clan of the Eora people, who lived in the area for many thousands of years. After European settlement in 1788, the number of indigenous people was decimated by a smallpox outbreak in 1791 and the destruction of traditional food sources on the land and in the water.
The intersection of William Street, Darlinghurst Road and Victoria Street at the locality's southernmost limit was named Queens Cross to celebrate Queen Victoria's diamond jubilee in 1897. Confusion with Queens Square in King Street in the city prompted its renaming as Kings Cross, after King Edward VII, in 1905.
During the early 19th century the Kings Cross-Potts Point area was one of Sydney's most prestigious suburbs, being far enough to escape the noise and smell of the central city but close enough for easy travel. An additional attraction was the commanding harbour views to the east and north and (from some points) views to the west as far as the Blue Mountains.
In 1828, the Governor of NSW Sir Ralph Darling subdivided the area, then known as Woolloomooloo Hill, into large allotments which he granted seventeen estates to favoured subordinates and leading businessmen. They built a series of grandiose mansions with sprawling gardens of up to ten acres (4 ha). The remnants of these gardens helped give the area its leafy character, and many of the mansions are commemorated through street names such as Roslyn, Orwell and Kellett. Most of the grand estates were ultimately subdivided with all but a handful of the great houses demolished. One of the surviving estates is Elizabeth Bay House, a quintessential example of Australian colonial architecture. Others, now used for other purposes, include Tusculum in Manning Street and Rockwall.
The Kings Cross district was Sydney's bohemian heartland from the early decades of the 20th century. The illegal trading of alcohol, known as sly grog, was notorious in the area up until mid-century. The area was home to a large number of artists, including writers, poets and journalists including Kenneth Slessor, Christopher Brennan, Hal Porter, George Sprod and Dame Mary Gilmore, actors including Peter Finch and Chips Rafferty, and painter Sir William Dobell.
From the 1960s onwards Kings Cross also came to serve as both the city's main tourist accommodation and entertainment mecca, as well as its red-light district. It thereby achieved a high level of notoriety out of all proportion to its limited geographical extent. Hundreds of American servicemen on R & R (rest and recreation) leave flocked to the area each week in search of entertainment.
Since the turn of the century Kings Cross has witnessed a large number of real estate developments, both refurbishments of historic apartment buildings and the construction of new ones. This has resulted in demographic changes as affluent professionals are increasingly residing in the area and are in turn significantly altering the character of the area. A number of upmarket bars, such as Trademark Hotel, co-owned by entrepreneur, John Ibrahim now attract a changing clientile to the area.