In 1872, the Overland Telegraph Line and Telegraphy Station were established, and the population increased. A Post Office was opened at the station in 1883, by 1888 businesses had expanded with the opening of the Cash Store and the licensed Sportsman’ Bar.

Between 1914 and 1917 a second settlement began to develop 3km downstream from the original settlement at Knott’s Crossing. It was called Emungalan (Indigenous name for ‘Place of Stone’) and was the railhead for the North Australia Railway from 1917 to 1926.

After the town site was surveyed in 1917 the township quickly grew. Within a short time it had over 200 people, 90% of who were male. The settlement consisted of a school, hotel, 3 saddlers, a blacksmith, general stores, ranger’s hut and a cattle yard. An airstrip was constructed just south west of the town and a racetrack was used for regular meetings.

With the completion of the high level river crossing in 1926 Katherine was once again on the move, this time from Emungalan on the north bank, across the newly opened railway bridge to the South bank. On this site, the town of Katherine had been planned and shops, hotels and residents moved in masses. With the construction of the new railway station and facilities and the increased use of aeroplanes, Katherine became an important centre in a transportation network.