Milford Sound was initially overlooked by European explorers, because its narrow entry did not appear to lead into such large interior bays. Sailing ship captains such as James Cook, who bypassed Milford Sound on his journeys for just this reason, also feared venturing too close to the steep mountainsides, afraid that wind conditions would prevent escape (this refers to Doubtful Sound, so named as Cook thought it doubtful he would escape if he sailed in)

The fjord was a playground for local Maori who had acquired a large amount of local marine knowledge including tidal patterns and fish feeding patterns over generations prior to European arrival. The fjord remained undiscovered by Europeans until a sealer by the name of Captain John Grono discovered it in around 1812 and named it Milford Haven after his homeland in Wales. Captain John Stokes later renamed Milford Haven as Milford Sound.

While Fiordland as such remained one of the least-explored areas of New Zealand up to the 20th century, Milford Sound’s natural beauty soon attracted national and international renown, and led to the discovery of the MacKinnon Pass in 1888, soon to become a part of the new Milford Track an early walking tourism trail. In the same year, the low watershed saddle between the Holliford River and the Cleddau River was discovered, where the Homer Tunnel was to be developed about sixty years later to provide road access.