Situated in a commanding position overlooking the Tauranga harbour entrance and Mauao, the northern point of Te Papa peninsula was once the site of Ngāti Tapu's busy Ōtamataha Pā. In 1828, a raid by Ngāti Maru from the Thames district led to the death of most of the inhabitants, and the abandonment of the pā. Bones dating from this time are still sometimes found when erosion of the cliffs occurs.

When the nearby Te Papa Mission Station was established in 1838, this tapu (sacred) area was chosen by the missionaries as a suitable place for a graveyard, now the oldest European cemetery in the Bay of Plenty. The first burial took place all too soon. Ann Catherine Wilson, wife of one of the missionaries, died of breast cancer in November of that year.

As well as the graves of mission families, monuments in the cemetery tell the story of around 55 soldiers, sailors and several Māori who died during the New Zealand Wars. For this reason, the cemetery was referred to as the Military Cemetery for many years. Enemies in battle, but all equally honoured in death, they were part of the 1864 Battles of Gate Pā / Pukehinahina and Te Ranga and other engagements around the area. There are monuments to the Naval Brigade, the 43rd Monmouth Regiment, and the grave of 14 Māori warriors. Rāwiri Puhirake Tuaia, leader of the iwi at Gate Pā, who was killed at Te Ranga, was exhumed and reinterred here in 1874. Taiaho Hōri Ngātai, whose account of Gate Pā appears in Mair's The Story of Gate Pā, was buried here when he died in 1912.

Whilst the 1864 graves were being dug, a greenstone mere was unearthed, known by the name of Te Raukaraka (pounamu mere) due to it being made from a rare kind of greenstone resembling in colour the leaves of the karaka tree. It belonged to the Tauranga chief Koraurau, who held Otamataha Pā. In 1828, he gave the mere to Gilbert Mair (Snr), father of Gilbert Mair, during a visit to Tauranga in the mission schooner Herald. Mair (Snr) left the mere for a short time in the care of Koraurau, but on his return found that Ōtamataha Pā had been decimated and Koraurau killed. Nothing more was heard of the mere until after the Battle of Gate Pa / Pukehinahina in 1864, when some soldiers, who were digging graves for their fallen comrades, unearthed it. The mere was identified and handed over to Koraurau's son Hohepa Te Mea, who gave it to Captain Mair in pursuance of his father's promise. Auckland Museum now holds the mere.

Although Mission Cemetery was officially closed in 1881, some of the early settlers and their families were also buried here. Official records of the burials in Mission Cemetery have either been lost or were never kept. The cemetery is part of an ongoing project by Fiona Kean and Debbie McCauley to identify as many of those buried here as possible.

In May 2014, one month after the 150th commemoration of the Battle of Gate Pā / Pukehinahina, the cemetery was part of a 7,863 square metre site transferred from the New Zealand Mission Trust to the Ōtamataha Trust - the hapū of Ngāti Tapu and Ngāi Tamarāwaho. Today the cemetery is a tranquil space for both Māori and Pākehā to rest in peace.