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The first settler in the district was Alfred Weaver, who brought 7,000 sheep with him. Weaver built a shearing shed in 1846 where Stansbury now stands. Due to the abundance of oysters found in the bay, Stansbury was originally known as Oyster Bay and had a reputation for the best oysters in South Australia. For a number of years, there were between 15 and 20 oyster dredges working the bay, until eventually it was fished out.
The name Stansbury came into being when Governor Sir Anthony Musgrave renamed it in 1873, after his friend Mr Stansbury.
Stansbury is also the location of Adelaide Brighton Cement's Klein Point quarry, shipping limestone to Adelaide regularly on the Accolade 2..