Allan Cunningham’s exploration of the Darling Downs pointed the way toward more flourishing settlement, which had already begun overland from the south from 1840 after the penal colony had been abolished. The early squatters were followed in 1842 by the first free settlers, and sales of land took place. The main hindrances then became the remoteness of the Moreton Bay district, the lack of understanding of the region in Sydney, and the consequent small number of settlers—no more than 2,000 in the mid-1840s. In 1840 pioneer rancher Patrick Leslie ventured on the downs at Warwick with sheep, and the first crop farmers, apart from some Moravian missionaries at Nundah in the penal days, were brought by John Dunmore Lang in the Fortitude in 1849. It was therefore mid-century before immigrant ships from Britain sailed directly to Brisbane. Nevertheless, political separation from New South Wales was achieved in 1859, and the colony of Queensland was proclaimed. At that time the European population numbered only 23,520, and no industry had yet been established, although gold had been discovered in 1858.

Coal was found at Ipswich as early as 1827, and the first mine opened in 1846, but it was a gold rush that really inaugurated the mining industry. From 1858 to 1873 the east and north of the colony were invaded and opened up by diggers at Canoona, Peak Downs, Gympie, Ravenswood, Charters Towers, and Palmer River. Within a few months, isolated spots in the bush became townships of 10,000 people. Some of the beginnings of the later anti-immigration White Australia policy may be seen in the discriminatory acts of the British Parliament at that time against Chinese and other Asian miners and speculators. By 1867 the European population of the state had grown to 100,000. Even where the gold failed, as at Canoona, a town such as Rockhampton could rise from the ruins. It was near Rockhampton that Mount Morgan, a mountain of gold and copper, was discovered in 1882.

In the 1860s westward migration was rapid wherever there was water, and the movement was encouraged in 1869 by an act of Parliament that granted 21-year leases to those who had 25 sheep or 5 cattle to the square mile. Many of the early pastoralists failed. Wool had to be transported in drays by long trains of bullocks, and markets were far away and uncertain.

By 1873, however, Victorian-era prosperity (in gold) began to be invested in Queensland. The first railways, from Ipswich to Dalby and Warwick, were operating by 1870. The European population of Queensland was more than 200,000 in 1880, with the largest cities being Brisbane, Townsville, Toowoomba, Mackay, and Rockhampton. Pastoral industry spread across the Darling Downs in the 1860s and ’70s. By 1880 the colony had some three million cattle and seven million sheep. Sugar and cotton production, established in the 1860s, increased.

There was, however, strife between the early crop farmers and the graziers who had come before them. Hewing out their farms by clearing the bush, attempting crops where none had ever been cultivated, the farmers won the contemptuous name of “cockatoo farmers,” or, more neutrally, “selectors.” Over time they advanced from corn (maize) and pumpkins to alfalfa (lucerne) and sorghum; their livestock increased; and the plow, reaper, and farmhouse replaced the hoe, scythe and sickle, and bark hut. Through a succession of land acquisition acts, the government had recovered much pastoral land for the arable farmers by 1900, and by the mid-20th century land that had originally belonged to graziers had become renowned for wheat, sugarcane, and bacon.

Also contributing to the disappearance of the graziers were the years of severe drought and economic depression between 1890 and 1902, as well as an onslaught of the cattle tick from northern Queensland in 1894. Both events decimated flocks and herds. An industry that had been stimulated by the advent of refrigeration and that had made its mark on Australian life in the tradition of droving over huge distances saw its cattle population halved by the start of the 20th century.

Dairying did not flourish until the 20th century, when there were sufficiently populous towns to give it encouragement. Until 1888 Queensland imported much of its butter from the south, but by 1895 it had become self-sufficient in dairy products.

Between 1863 and 1904 Queensland was involved in the dispute over the employment of South Sea islanders (Kanakas) as cheap labour. The recruiting of Kanakas, sometimes against their will, began with the introduction of cotton cultivation during the American Civil War (1861–65). When importation of Pacific Islanders was banned in the early 1890s—an act that was rescinded in the face of an economic crisis later in the decade—the issue of cheap labour became a political struggle between the liberals and conservatives. Toward the end of the 19th century, the proliferation of small farms and a government-subsidized central mill system shifted sugar production away from the plantation model that relied on indentured labourers. This development strengthened the case against importing Kanakas. In 1901 Australia’s new federal government officially ended the importation of labourers in the White Australia policy, and from 1904 to 1908 more than 7,000 islanders were forcibly deported.

The Kanaka problem influenced the movement demanding the segregation of white from Aboriginal communities, particularly in central and northern Queensland (the region of sugarcane and goldfields). Whereas the sugar planters wanted separation, the miners did not, fearing that the planters would impose a policy of continued importation of cheap non-European labour. Queensland had a rapacious frontier in the 19th century, which led to the establishment of the Native Mounted Police in 1848. This force, along with private settlers, was responsible for killing thousands of indigenous people. In 1897 provision was made to forcibly remove Aborigines to government reserves, thereby instituting a de facto segregation system. The reserves remained under strict government control until they were handed over to the Aboriginal councils in 1985.

Toward the end of the 19th century, the increase in population, the advance of social legislation in Europe, the socialist idealism of William Lane, and the economic depression of the 1890s encouraged the growth of trade unionism and led to the emergence of an Australian Labor Party (ALP) with well-defined policies. The most notable event in Queensland during that period was the shearers’ strike in 1891, which erupted over unsatisfactory working conditions and the refusal of union shearers to work together with nonunion members. The strike was broken when the army was deployed, but subsequent legislation providing for shorter working hours, improved working conditions, and the encouragement of the smaller settler showed clearly the trend of the times. Intense industrial conflict continued, however, and erupted into a general strike in 1912. Queensland had the first Labor government in the world—for six days in December 1899—and the party rapidly became so strong that it remained in office almost continuously from 1915 to 1957 (a Country-Nationalist government was in office from May 1929 to June 1932).

In the 20th century, improved farming methods, irrigation, insecticides, communications, and new markets at home and in Japan greatly strengthened primary production. In 1923 vast silver-lead-zinc deposits were discovered at Mount Isa, and in 1969 more large reserves were found. Uranium was discovered and mined at Mary Kathleen from 1950 to 1963, and bauxite was found in great quantities at Weipa. In the 1960s the Moonie oil field, the natural gas field at Roma (piped to Brisbane), the open-cut coal deposits at Blackwater, and the huge mining port of Gladstone were developed.