At the behest of mariners and officers of the U.S. Navy, Congress appropriated $80,000 to the United States Lighthouse Board to construct a new beacon at Cape Hatteras in 1868. It was completed in just under two years under the direction of brevet Brigadier General J. H. Simpson of the U.S. Army Corps of Engineers,. The new Cape Hatteras lighthouse cost a total of $167,000. The new tower, from which the first-order light was first exhibited December 16, 1871, was the highest brick lighthouse tower in the world. It was 193 feet (59 m) above ground and the focal height of the light was 191 feet (58 m) above the water. The old tower "being no longer of any use and in danger of falling during some heavy storm" was demolished in February 1872.
In the spring of 1879 the tower was struck by lightning. Cracks subsequently appeared in the masonry walls, which was remedied by placing a metal rod to connect the iron work of the tower with an iron disk sunk in the ground. In 1912 the candlepower of the light was increased from 27,000 to 80,000.
Ever since the completion of the new tower in 1870, there had begun a very gradual encroachment of the sea upon the beach. This did not become serious, however, until 1919, when the high water line had advanced to about 300 feet (91 m) from the base of the tower. Since that time the surf gnawed steadily toward the base of the tower until 1935, when the site was finally reached by the surf. Several attempts were made to arrest this erosion, but dikes and breakwaters had been of no avail. In 1935, therefore, the tower light was replaced by a light on a skeleton steel tower placed farther back from the sea on a sand dune, 166 feet (51 m) above the sea, and visible for 19 miles (31 km). The old tower was then abandoned to the custody of the National Park Service.
The Civilian Conservation Corps and Works Progress Administration erected a series of wooden revetments which checked the wash that was carrying away the beach. In 1942 the Coast Guard resumed its control over the tower, and manned it as a lookout station until 1945. The old tower was now 500 to 900 feet (270 m) inland from the sea and again tenable as a site for the light, which was placed in commission January 23, 1950.
The new light consists of a 36-inch (0.91 m) aviation-type rotating beacon of 250,000 candlepower, visible 20 miles (32 km), and flashing white every 7.5 seconds. The skeleton steel tower was retained to guard against the time that the brick tower may again be endangered by erosion and thus require that the light again be moved.
The light displays a highly visible black and white diagonal Daymark paint job. It shares similar markings with the St. Augustine Lighthouse.
The National Park Service acquired ownership of the lighthouse when it was abandoned in 1935. In 1950, when the structure was again found safe for use, new lighting equipment was installed. Now the Coast Guard owns and operates the navigational equipment, while the National Park Service maintains the tower as a historic structure. To reach the light, which shines 191 feet (58 m) above mean high water mark, a Coast Guardsman must climb 268 steps. The construction order of 1,250,000 bricks was used in construction of the lighthouse and principal keeper's quarters.
Due to erosion of the shore, the Cape Hatteras lighthouse was moved from its original location at the edge of the ocean to safer ground 2,870 feet (870 m) inland. The move was controversial at the time with speculation that the structure would not survive the move, resulting in lawsuits that were later dismissed. Despite some opposition, work progressed and the move was completed between 1999 and 2000 in a massive operation. Rededicated in 2000, the lighthouse is fully open to the public at its new location further inland.