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On March 2, 1889, Congress approved $20,000 for the establishment of a lighthouse in the vicinity of Squan Inlet. It would become the last live-in lighthouse to be built on the Atlantic Coast.

The site was chosen to be Sea Girt at Wreck Pond, deed dated July 29, 1895, on a 100 by 100 foot lot overlooking the Atlantic Ocean. The lighthouse was positioned 19 miles south of Navesink Twin Lights, and 26 miles north of Barnegat Light. Completed one year later, the lighthouse was proudly commissioned, and its beacon was first illuminated on December 10, 1896.

Due to its location, it was originally (but incorrectly) called the Squan Inlet Lighthouse. The name was soon changed to Sea Girt Lighthouse on March 1, 1897.