Old Baileys Harbor Bird Cage Lighthouse began operation in 1853 on a small island now known as Lighthouse Island, a small island along the eastern shore of the harbor. Baileys Harbor was named after Captain Justice Bailey, who took refuge in the U-shaped inlet after encountering an unexpected, violent storm. The next day he went ashore and discovered an abundance of limestone and timber, of which he took samples to show his employer. His employer, Alanson Sweet, purchased 125 acres around the bay shortly thereafter, and he was instrumental in having a lighthouse built at Baileys Harbor. It was constructed using limestone from Sweet’s own quarry, and the tower measures 52 feet from the ground.

The lighthouse is no longer used as a navigational aid, but the tower and attached dwelling still remain standing. The tower is one of only four lighthouses in the United States still equipped with the birdcage-style lantern.