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In 1999, the Cape Hatteras lighthouse had to be moved from its original location at the edge of the ocean to safer ground 2,900 feet (880 m) inland, and 1,500 feet (460 m) from the shoreline. Due to erosion of the shore, the lighthouse was just 15 feet (4.6 m) from the ocean's edge and was in imminent danger.
On July 1, 1898, Congress appropriated $35,000 for the new lighthouse, with authority to contract for another $35,000, followed by an appropriation for a similar amount on March 3, 1901. A new skeleton tower was completed in 1903 on Smith Island and furnished with a first-order flashing lens apparatus. Upon completion of the new Cape Fear Light the old Cape Fear Station (Bald Head) was changed to a fourth-order fixed light and its name changed to Bald Head Light Station.