Two decades later, it was realized that a more substantial light would better serve the area. Accordingly, a 65-foot tower was designed for the station by O.M. Poe. Rather than demolish the 1858 lighthouse, the dwelling was retained and attached to the tall tower by an extended covered walkway. Work on the new tower began in 1871, and a third-order Fresnel was put in place in 1872.

The South Manitou Island Lighthouse was discontinued in 1958 and stood neglected until it was incorporated into the Sleeping Bear Dunes National Lakeshore in 1970. Park rangers provide tours of the tower to some of the almost 9,000 people who take the ferryboat ride to South Manitou each summer, but restoration of the interior of the dwelling is still waiting for the allocation of sufficient funds.

After a successful campaign carried out by the Manitou Island Memorial Society (a group that includes the descendants of former island residents) and Manitou Island Transit (which operates the ferry service from the mainland) to re-light the light, the Park Service restored the lantern room and the tower's spiral staircase in the summer of 2008, and a replica of the light’s original third-order Fresnel lens, created by Artworks Florida, was installed in the lantern late that fall. In conjunction with the reactivation of the South Manitou Lighthouse on May 30th, 2009, an interpretive talk on the history of the Manitou Passage and the shipwrecks that made the lighthouse necessary was held at the park's maritime museum, housed in an historic lifesaving station in Glen Haven. The beacon will shine forth now each year between May and October.