The later years of the Second World War were marked in Australia and New Zealand by the growth of a determination to exercise a decisive influence upon the future of the South Pacific region and to work together to secure this. The background to this resolve was the preponderant share being taken in the war against Japan by the United States and the fear consequently entertained that the Pacific Ocean might become an American lake. The upshot of this determination was the Australian and New Zealand Agreement of 1944 which, among other things, proposed the establishment of a regional advisory council for the area. In 1946 the proposal was further discussed at a conference of Commonwealth Prime Ministers at London, and in the same year Australia and New Zealand, acting as sponsoring powers, invited the United States, France, and the Netherlands, as powers with territorial interests in the area, to send delegates to a conference with a view to setting up such a regional organisation. As a consequence, the South Seas Conference met at Canberra in January-February 1947, with delegations from Australia, New Zealand, the United Kingdom, the United States, France, and the Netherlands. From the outset political and security matters were excluded from consideration; the proposed Commission was to act in a consultative capacity on questions of welfare of the peoples in the area and social and economic development.

The agreement concluded at the Conference set up a Commission consisting of the representatives of the six governments to act as an advisory body to the participating governments on economic and social development and on the welfare and development of the native peoples. Specifically it was to prepare and recommend development measures to governments, to facilitate research into the problems of the area, and to coordinate local projects. It has subsequently set up a Research Council and a Secretariat with headquarters at Noumea in New Caledonia.

Apart from research, one of the main functions of the Commission has been the provision of facilities for discussion of common problems by representatives from the islands themselves. Three-yearly South Pacific Conferences have been held to discuss area problems and to make recommendations to the Commission. Most actual development work is carried out by member countries themselves within their own territories. The Commission provides a way of coordinating these schemes and enlists the cooperation of such international bodies as the World Health Organisation, the Food and Agriculture Organisation, and UNESCO.