Oysters have been harvested on the east coast of Australia for many thousands of years. Coastal Aboriginal communities used the extensive estuarine oyster resource and may have farmed oysters by establishing shell cultch beds in shallow areas of estuaries. The British colonization of Australia commenced in 1788 and oysters were initially used for food and production of lime. Concerns about unsustainable exploitation led to introduction of legislation that directed the oyster industry to aquaculture in 1884. Translocation of oyster stock for fattening, from New Zealand to Australian east coast estuaries, was encouraged. Here evidence is presented that this activity resulted in mudworm disease appearing in oyster farming estuaries on the Australian east coast between 1880 and 1900. The pandemic permanently destroyed natural sub-tidal oyster reefs and forced the oyster industry to adopt avoidance farming techniques including intertidal farming to cope with mudworm.