The Observatory is a unique multi-storeyed 19th century Victorian shop and home which is now a museum. This house had a place in the identification of the first diamond that was found in South Africa, and a display on the ground floor tells this story. Its connection with the identification of the Eureka in 1867 prompted De Beers Consolidated Mines Ltd. to purchase and restore the Observatory in 1980-82 to commemorate the beginning of the diamond industry in South Africa.
A feature of the Observatory is a special exhibition focusing on Dr William G. Atherstone and the five other main participants in the identification of the first diamond discovered in South Africa in 1867.

The owner-designer of the Observatory was a watchmaker and jeweller, Henry Carter Galpin, who lived in Grahamstown from 1850 until his death in 1886. A successful businessman with seven sons, he still found time to pursue his interests of astronomy, optics, natural history, music and practical mechanics - all of which are reflected in the house he designed.

Its unusual features include: