In 1870 von Guerard was appointed the first Master of the School of Painting at the National Gallery of Victoria, where he was to influence the training of artists for the next 11 years. His reputation, high at the beginning of this period, had faded somewhat towards the end because of his rigid adherence to picturesque subject matter and detailed treatment in the face of the rise of the more intimate Heidelberg School style. Amongst his pupils were Frederick McCubbin and Tom Roberts. Von Guerard retired from his position at the National Gallery School the end of 1881 and departed for Europe in January 1882. In 1891 his wife died. Two years later, he lost his investments in the Australian bank crash and he lived in poverty until his death in Chelsea, London, on 17 April 1901.