What could be mistaken as a lighthouse, the Portland Observatory was built in 1807 by Captain Lemuel Moody to serve as a communication station for Portland Harbor. The Portland Observatory was one of the earliest marine signal stations in the United States and the only one still standing today.

It was a commercial venture designed to give a competitive edge to ship owners who paid a subscription fee of $5.00 a year to alert them when their sailing ships were arriving in port. The tapered, octagonal tower is 86 feet tall with a diameter of 32 feet at the base and 15 feet at the observation deck.

With his powerful telescope at the top of the tower, Moody could identify incoming vessels for up to 30 miles away. Moody informed subscribing merchants by hoisting signal flags identifying their vessels. This signal tower greatly increased the efficiency of Portland Harbor and the observatory remained a working marine signal tower run by the Moody family until 1923. The invention of the two-way radio made the signal tower obsolete.

The tower was added to the National Register of Historic Places in 1972 and became a National Historic Landmark in 2006.