The first lighthouse on this site was built in about 1667 by Sir Robert Reading, and was one of six that Reading had received letters patent to build from Charles II in 1665. The original facility consisted of a small cottage and a square tower which supported a coal-fired beacon. Parts of the original buildings remain. In 1790, the coal beacon was replaced with a set of six Argand oil lamps, each including a silvered copper parabolic and a bulls-eye glass pane. During this period, the lighthouse was maintained by the Revenue Commissioners.
In June, 1972, the system was electrified, with a 1,500 watt bulb in a rotating lens, producing a flash every 20 seconds that can be seen at a range of 26 nautical miles (48 km). In 1973, additional dwellings for Supernumerary Assistant Lighthouse Keepers were built, as the Baily lighthouse became a training facility for Supernumerary Assistant Lighthouse Keepers who would then transfer to other lighthouses.
Modern technology made light a secondary warning system, and a radiobeacon became the primary method of warning ships. Starting in 1978, the light was operated only in poor visibility, along with the fog signal. The fog signal was finally discontinued in 1995.
In late 1996, the lighthouse was converted to automatic operation, and
the last of the Keepers left on March 24, 1997, making Baily the last
Irish lighthouse to go automatic. Radiobeacon service was discontinued
in 1999, and at the same time, radar and additional communications
equipment was installed. Although officially an automatic station, an
attendant still lives in the Principal Keeper's residence.