Tidmouth Harbour is deep and well sheltered and has been known for centuries as a safe place in which to ride out storms. Up until the late 19th century, the harbour was mostly used by smugglers who alternated as fishermen. The harbour's rise as a major commercial port is mainly due to the enterprise of A. W. Dry & Co, a drainage company.
By 1905, the Ulfstead Mining Company had become dissatisfied with Knapford as a port and adopted A. W. Dry's suggestion of extending their tramway along the coastal road to Tidmouth. A. W. Dry & Co, however, faced considerable opposition when wishing to use the harbour as a base. Boat building was among their various activities and they had produced a new design of fishing boat which fortunately found favour with the Tidmouth men. This resulted in a amicable arrangement. Supplies and equipment for the drainage project could then be brought in by sea via Tidmouth Harbour.
It was not until the formation of the double tracked NWR in 1916, connecting Tidmouth at last with the outside world, that the harbour's potential was realised and its development could really begin. The port's growth was phenomenal and turned Tidmouth into the Island's commercial capital. During the 1950s and 60s, the port was heavily congested, which resulted in Sir Charles Topham Hatt redeveloping Knapford Harbour and Arlesburgh Harbour to relieve and supplement Tidmouth.
Tidmouth Harbour is also a major fishing port, with the fishermen of Tidmouth having developed a special kippering process and since 1935 "The Flying Kipper" has departed from here nightly to deliver fish across the Island and to the Mainland.