On December 4, 1890, the buoy was torn from its moorings and went ashore near Cape Mutton. Some men retrieved the buoy but refused to return it to the government until they were paid $80. In 1895, the buoy was lost after going adrift yet again, and plans were made to replace the unreliable buoy with a light and fog alarm. Richard White, Inspector of Lighthouses, visited Trepassey and after investigating Powles Head and Pounder Cove, which respectively mark the eastern and western sides of the entrance to Trepassey Harbour, decided that Powles Head was most suitable. Inspector White noted that water was scarce at Powles Head but believed that springs could be discovered near the site.
Although Inspector White wrote in 1895 that a cast-iron tower, an illuminating apparatus, and a Champion foghorn were in storage and ready to be used, Powles Head did not receive its new light until 1902. The original Powles Head Lighthouse was a square, wooden tower, with sloping sides, attached to a wooden keeperís dwelling by a 9.1-metre-long passageway. These structures were painted white, and the tower employed a fifth-order lens to alternately display one-second periods of light and darkness at a focal plane of thirty-one metres. John Devereux was hired as the first keeper of the light with J. Waddleton as his assistant.
In 1907, the fog alarm at Powles Head was changed to a diaphone that sounded five-seconds blasts separated by 112 seconds of silence. A flat-roofed, one-storey building was erected southeast of the lighthouse to house the alarm, and the diaphone horn projected from the southern side of this structure.
The wooden light tower was replaced by a round iron tower, painted white, in 1925, but the signature of the light remained the same. By 1960, this iron tower was thoroughly rusted, and it was replaced that year by the current combination light and fog alarm building, which has a square tower rising from one of its corners. In 1961, two keeperís dwellings were built near the new lighthouse. Commercial power reached the station in 1970, and the diaphone fog signal was changed to an electronic signal in 1972.
Powles Head became a one-person station in 1990, and the assistant keeperís dwelling was subsequently removed from the site. The station is no longer staffed, but its last keeper, Tom Corrigan, lived at the site for some time after his retirement.