William Gilbert laid the foundation of the science of geomagnetism in 1600 when he stated that the Earth itself is a great magnet. In order to develop a scientific understanding of the global nature of the Earth's magnetic field, a requirement is to have simultaneous observations at many places on the Earth's surface.

It was for this reason that Prof A Ogg, Professor of Physics at the University of Cape Town, was requested to establish a magnetic observatory in Cape Town by the International Commission for the Polar Year in 1932. A magnetic observatory was thus established on the UCT campus using funding and instruments supplied by overseas institutions.

In 1937 the responsibility for funding and operation of the observatory was transferred to the Trigonometrical Survey Office of the Department of Lands. However, by 1940 the developing suburban electric railway system was adversely affecting the geomagnetic field observations and it was necessary to relocate the observatory to a magnetically clean site. A suitable site was found in Hermanus and the new Hermanus Magnetic Observatory (HMO) officially commenced operation on 1st January 1941.

In 1969 the HMO was incorporated into the CSIR and in 1987, when the CSIR commercialised its activities, the HMO was also obliged to become more commercially oriented. In 2001 the HMO's parent organisation again changed with the transfer from the CSIR to the NRF. In the Government Gazette of 20 July 2001, Dr Ben Ngubane, Minister of Arts, Culture,Science and Technology, announced that the HMO would function as a National Research Facility under the NRF, retrospectively from 1st April 2001.