Since 1718, transportation to the American colonies had been a penalty for various offences in Britain, with approximately one thousand convicts transported per year. Forced to find an alternative location after the loss of the Thirteen Colonies in 1783, the British government turned to Australia. The coast of Australia had been discovered for Europeans by the Dutch in 1606, but there was no attempt to colonise it. In 1770 James Cook charted the eastern coast while on a scientific voyage, claimed the continent for Britain, and named it New South Wales. In 1778, Joseph Banks, Cook's botanist on the voyage, presented evidence to the government on the suitability of Botany Bay for the establishment of a penal settlement, and in 1787 the first shipment of convicts set sail, arriving in 1788. Unusually, Australia was claimed through proclamation. Indigenous Australians were considered too uncivilised to require treaties, and colonisation brought disease and violence that together with the deliberate dispossession of land and culture were devastating to these peoples. Britain continued to transport convicts to New South Wales until 1840, to Tasmania until 1853 and to Western Australia until 1868. The Australian colonies became profitable exporters of wool and gold, mainly because of the Victorian gold rush, making its capital Melbourne for a time the richest city in the world.

During his voyage, Cook visited New Zealand, known to Europeans due to the 1642 voyage of the Dutch explorer, Abel Tasman. Cook claimed both the North and the South islands for the British crown in 1769 and 1770 respectively. Initially, interaction between the indigenous Maori population and European settlers was limited to the trading of goods. European settlement increased through the early decades of the 19th century, with many trading stations being established, especially in the North. In 1839, the New Zealand Company announced plans to buy large tracts of land and establish colonies in New Zealand.

The British also expanded their mercantile interests in the North Pacific. Spain and Britain had become rivals in the area, culminating in the Nootka Crisis in 1789. Both sides mobilized for war, but when France refused to support Spain it was forced to back down, leading to the Nootka Convention. The outcome was a humiliation for Spain, which practically renounced all sovereignty on the North Pacific coast. This opened the way to British expansion in the area, and a number of expeditions took place; firstly a naval expedition led by George Vancouver which explored the inlets around the Pacific North West, particularly around Vancouver Island. On land, expeditions sought to discover a river route to the Pacific for the extension of the North American fur trade. Alexander Mackenzie of the North West Company led the first, starting out in 1792, and a year a later he became the first European to reach the Pacific overland north of the Rio Grande, reaching the ocean near present-day Bella Coola. This preceded the Lewis and Clark Expedition by twelve years. Shortly thereafter, Mackenzie's companion, John Finlay, founded the first permanent European settlement in British Columbia, Fort St. John. The North West Company sought further exploration and backed expeditions by David Thompson, starting in 1797, and later by Simon Fraser. These pushed into the wilderness territories of the Rocky Mountains and Interior Plateau to the Strait of Georgia on the Pacific Coast, expanding British North America westward.