During the gold rush, the Millwood mines were the place to be. Alluvial Gold was found in 1885 in Millwood, about 15 km's outside of Knysna, deep into the indigenous Knysna forest.

Later on, all the old mining buildings got moved to Knysna. Fans of the mining society of Knysna kept one of the original cottages and the mine in good order, right up to today, so that visitors can still visit the Millwood Mines. One of the original mining houses was even moved back to the mining site for tourists to see.

Knysna also became a port for naval ships as well as commercial ships brining goods and supplies to this part of the country. The very first trading store was set up by Arnt Leonard Thesen and his family who moved to Knysna to set up this trading store.

Then, a gold nugget was found in 1876 by James Hooper on his farm. This started the history of Knysna with gold.

Knysna's official founding date was 1825. In 1851, Knysna was declared a magistrate, and later on in 1881, it was declared a town. The use of the harbor ceased by the time transportation of goods and supplies was done via railroad. Knysna is still mainly served by steam engines.

The name Knysna is a Khoi word but it's uncertain as to its exact meaning. It could mean 'place of wood', or it could mean 'fern leaves', but its most probable meaning is straight down' - an obvious reference to the Heads. Knysna Heads must be the most striking geological features along the entire Southern African coastline. They flank a deep but potentially treacherous channel through which the sea pours in to flood the wide and breathtakingly pretty lagoon at the mouth of the Knysna River.

Knysna is one of the Southern Cape coast's best known holiday destinations, situated between lush forests and the shores of the peaceful lagoon - it offers many activities and attractions of a wide variety. The most well known attraction being the heads - two great sandstone cliffs guarding the mouth of the lagoon which connects the estuary with the sea. A lookout has been erected on the Eastern Head, commanding spectacular views of the lagoon, Leisure Isle and Knysna.

The Western Head is a privately owned nature Reserve - Featherbed Bay. The Knysna Lagoon is one of the few places along the coast and in the world that supports a oyster hatchery. And the Knysna oysters are reputedly among the tastiest in the world. Millwood House Museum in Queen Street houses material relating to the history of the town, and includes artefacts once owned by George Rex. It was built from yellowwood at the end of the previous century during the gold rush. From Millwood, it was later moved to Knysna.