Sydney, city, capital of the state of New South Wales, Australia. Located on Australia’s southeastern coast, Sydney is the country’s largest city and, with its magnificent harbour and strategic position, is one of the most important ports in the South Pacific. In the early 19th century, when it was still a small convict settlement and the first settlers had barely penetrated the interior, it had already established trade with the Pacific Islands, India, China, South Africa, and the Americas. The first sight of Sydney, whether from the sea or the air, is always spectacular.