Douglas Station was established as the main terminus of the railway with the opening of the Peel Line in 1873 on a site known as The Lake at the inner end of the town’s harbour on reclaimed land nearby to the river from which the town takes its name.  The original structure provided was a timber affair on approximately the site of the booking hall building extant today, with an island platform also provided in time for the first trains.  A locomotive shed and workshops were also provided at this time.  The site was expanded for the opening of the south line the following year and quickly became a very busy terminus, its close proximity to the harbour and arriving ships being very useful.

As the railway established itself the facilities were expanded, beginning with the administration block, on which work commenced in 1888; this was followed by the booking hall and forecourt area, all of which survive today, though the administration block is now home to the island’s Customs & Excise division.  The signal box was erected by Dutton & Co., in 1892 with the workshops also being redeveloped and expanded at this time resulting in the complex you see today.  A large carriage shed capable of housing the majority of passenger rolling stock followed in 1893 and the goods yard was also provided at this time, seeing the station reach its maximum extent.

The platforms established upon the opening of the south line were heightened along with the extant Peel Line platform at the turn of the century, and these were fitted with overall glazed canopies in 1909 giving the station its iconic look and the reputation as “a narrow gauge station second to none”.  The addition of a toilet block and stables with the iconic clock tower featuring gilt turrets completed the station.  The site remained largely in this condition for many years, the first significant loss being upon nationalisation in 1978 when part of the yard was lifted.  With the liquidation of the Railway Company in 1980 the administration block was given over to Customs & Excise.

The interior of the booking hall building was altered in 1980 to create office accommodation for the Manx Electric Railway Board who initially had responsibility for running the railway; at this time the south line platforms were also lost and the canopies removed owing to allegedly being in a parlous state; those who witnessed their removal would disagree with this statement.  The goods yard and former south platform area was given over to bus parking at this time, and the much reduced station became a shadow of its former self.  In 1991 the booking hall interior was fitted with a mezzanine floor to give further seating to Greens, the vegetarian restaurant that occupied the area.  Restoration work followed in 1991 which saw period lamp standards fitted on the remaining platform, restoration of the clock tower, new traditional picket fencing on the site and reintroduction of period tinplate advertisements.

In 1998 it was announced that the carriage shed of 1893 was to be demolished to make way for new transport headquarters of Isle of Man Transport, to be known as Banks Circus.  To allow this development to take place, the signal box, out of commission since 1980, was relocated to a site nearer the running lines where it remains today.  The facility opened in 1999, by which time a replacement smaller carriage shed had been erected on the site of the former coal yard beyond the workshops.  It is largely in this format that the station remains today, the south line platform area being covered with macadam as part of the development to form car parking, at which time Road Five was lost, to be replaced with a new siding now known as Road Zero running alongside the platforms.

In 2017 work began on a major reconstruction of the booking hall building, now home to The Tickethall, it being found that a major sewer beneath the structure was causing severe subsidence.  The work involved removing the 1991 mezzanine floor and replacing it with a more open-plan mezzanine as well as establishing a new retail area, removing the now disused offices, and replacing them with a new catering kitchen, lift, disabled toilet and cafe area.  In this form the booking hall remains, complete with a new glazed canopy on its rear, reserved for diners rather than passengers, meaning there still remains no covered waiting area for railway patrons.  The kitchen also serves the dining train, which is commonly found parked up on Road Three where it is serviced by the caterers.