Portland was never a naval dockyard to compare with Portsmouth or Devonport. No ships were built there and it never had the same facilities for docking and refitting. It was not a 'home port' for ships' companies but it did provide a sheltered anchorage for a fleet and ships were able to take on coal, a factor of great importance. From the anchorage the Channel Fleet, (sometimes called the Channel Squadron), sailed on exercises, prepared for summer cruises or assembled in times of a national emergency.

No major war occurred in the late 19th century, but the rise of German naval power shifted the strategic balance towards the North Sea. However a Channel Fleet was still required to deny those waters to the enemy and to protect troop movements to mainland Europe. When war came in 1914, the battle squadrons of the Channel Fleet left Portland for Dover and the Thames Estuary.

After peace in 1918 there was no further need for a Channel Squadron, though the Home Fleet regularly used Portland Harbour. However in 1939 a Channel force was once more constituted to protect the passage of the British Expeditionary Force until, in 1940, the Germans occupied France and Portland Harbour became vulnerable to air attack.