Arlesburgh is an ancient port, and is a deep water harbour formed by the same geological rift as Douglas on the Isle of Man. The port enjoyed a period of peak prosperity between 1880 and 1930, when it was a recognised calling place for the Isle of Man Steam Packet Company's steamers from Douglas and Ramsey and exported produce from mines in the Arlesdale Valley. The Mid Sodor Railway had a station here, and it became the port for Peel Godred.
The steamer service ended when the Mid Sodor closed its passenger service in 1936, and when the last mine in the valley closed in 1947, the port fell into sad decay. Revival began in 1965/66 when the NWR decided to use the port as a supplement to Tidmouth and Knapford . They relaid the harbour extension, built new jetties, and installed up to date dockside equipment.
Later, the line running through the harbour was extended to run up to Harwick. After Thomas discovered a pirate ship in a cavern, the ship was restored and taken to Arlesburgh Harbour, where it would be put on display to the public. Thomas also managed to stop Sailor John from escaping with the treasure here, and when the Harwick Branch Line was officially opened, the engines went through the harbour while the treasure was recovered from the bottom of the sea.