The hilltop site has a longer astronomical history than the current building suggests. The Wellington City Observatory, nicknamed "The Tin Shed," was established there in 1924. It was demolished and replaced by the Carter Observatory, which opened on 20 December 1941 -- delayed by the early disruptions of the Second World War. The observatory commemorates Charles Carter, a politician who gifted his estate to what later became the Royal Society of New Zealand for the specific purpose of establishing an astronomical observatory in or near Wellington. Parliament formally created the Carter Observatory in 1937. Over the following decades, it became the base for serious astronomical research in New Zealand, beginning with solar investigations in its early years and expanding during the 1970s to variable stars, galaxies, comets, and asteroids. In 1977, the Carter Observatory was designated New Zealand's National Observatory, a recognition that this modest hilltop dome had become the country's primary eye on the cosmos.

In April 1968, the Carter Observatory participated in an international effort that demonstrated the value of having a good telescope in the southern hemisphere. Astronomers used the Cooke refractor to record an occultation of Neptune by the Moon -- watching Neptune disappear behind the lunar disc and reappear on the other side. Photometric and visual data from New Zealand, Australian, and Japanese observers were combined by U.S. Naval Observatory astronomers to derive an improved measurement of Neptune's diameter. It was the kind of work that required the right telescope in the right location at the right moment, and the Carter Observatory delivered. The lens had been replaced once already by that point -- the original 9-inch achromat was swapped for a photovisual objective in 1896 -- and by 2001, after more than a century of use, that lens too would be retired in favor of a modern aplanatic objective. The telescope's bones remained the same. Only its eyes changed.

Generosity has shaped this observatory at every turn. Charles Carter's estate made the building possible. In 1968, New Zealand writer and philanthropist Ruth Crisp donated a 16-inch Cassegrain reflector, manufactured by Boller and Chivens, which was used for research at the Carter Observatory's outstation at Black Birch in the South Island before being moved to Wellington. In 1991, the Wellington Planetarium Society gifted their Zeiss planetarium to the Observatory Board, and the Golden Bay Planetarium was relocated from Civic Square in downtown Wellington to the Carter site. A grant from Pub Charity motorized the Crisp telescope's dome and re-aluminised its mirrors in 2005. Even the nearby Thomas King Observatory, which Space Place now manages, carries a name that honors contribution. The pattern is consistent: when Wellington has needed astronomical infrastructure, private citizens and community organizations have stepped forward to provide it.

By the early 2000s, the observatory's role had shifted decisively from research to public education. Parliament repealed the Carter Observatory Act in 2010, transferring responsibility from the Crown to the Wellington City Council. A digital fulldome planetarium system -- six 4K projectors driving a nine-metre dome that seats 66 people -- was installed during a refurbishment the same year, replacing the older Zeiss projector with immersive digital sky simulations. In 2015, Museums Wellington rebranded the facility as Space Place at Carter Observatory, a name that reflected its transformation from a research institution into a destination where families ride the Wellington Cable Car to the top of the Botanic Garden and spend an evening looking through a telescope that has been looking at the sky since the year New Zealand became a self-governing colony. Heritage New Zealand lists the building as a Category 2 Historic Place. It is now one of four institutions run by Experience Wellington, alongside the Wellington Museum, the Cable Car Museum, and the City Gallery.