Lying 82 km north-west of Invercargill, Nightcaps unfurls along the foothills that mark the north-western perimeter of the Southland Plains. The settlement developed from 1880 to exploit the massive coal field – a wide band running across Northern Southland. Nightcaps was a tightly knit ‘company town’ with a strong miners’ union. The Nightcaps Coal Company built its own railway and produced some 1.8 million tonnes of coal, mostly low-grade lignite (or ‘brown coal’), from underground mines. It operated for over 40 years before the mines were exhausted and miners shifted to nearby Ōhai.

Meaning of place name
The name was possibly given because the tops of the Takitimu Mountains, which were often snowcapped, could be seen from the little township. On another account, Captain John Howell with several companions were riding up the river flat when one of them remarked on the thin covering of fog on the hills known as the Nobbles. Howell replied, 'Oh, they have their nightcaps on' - and so the name was given.