Governor Alexander Spotswood first proposed building a lighthouse at Cape Henry in a message to the Virginia House of Burgesses on November 27, 1720. He suggested the province of Maryland should help pay part of the construction costs. For the next thirty-two years, various sessions of the House of Burgesses proposed building a lighthouse at Cape Henry with assistance from Maryland, but nothing was done. Finally, in 1752, the General Assembly passed an act to construct the lighthouse using revenues on an export tax on tobacco to pay for it. In 1759, the British Government disallowed the law, claiming the tax would infringe on the tobacco trade. In 1772, another act was passed and 6,000 pounds were appropriated for building the lighthouse. Construction began before the British could object but the American Revolution stopped further progress. During the war, a lookout station and signal fires were maintained to warn of the approach of enemy ships.
In 1789, the first congress of the United States at their first session enacted a law to establish a lighthouse on Cape Henry near the entrance to Chesapeake Bay. President George Washington approved the law on August 7, 1789. The lighthouse was the first federal building authorized by the United States Government under the Constitution.
Two acres of land on Cape Henry were ceded by the State of Virginia to the federal government and a contract was concluded to erect and equip the lighthouse. The contractor had serious problems transporting the sandstone used in the construction of the ninety foot tower. However, the stone has a special significance since it came from the same Aquia, Virginia quarries that provided stone or Mount Vernon, the U.S. Capitol, and the White House. In 1791, the lighthouse was completed at a cost of $17,500. Whale oil (later kerosene) was burned for illumination, first in an "iron lanthorn", then in Argand lamps with metal reflectors.
In 1861, the light was damaged by Civil War fighting. The first lighship was put into service between Cape Henry and Cape Charles in 1861. It continued until 1863, when the lighthouse was repaired and service was restored. The light continued to shine until 1881 when it was replaced by the modern lighthouse nearby which is still in use today.