On 1 Dec 1917, a group of prominent men representing the Provisional Committee of a proposed boys' school bought the "Cranbrook Estate" in Bellevue Hill, comprised of a large sandstone house and about seven acres of land. The house, known as "Cranbrook", was built in 1859 as a private residence, and was owned by the New South Wales government between 1902 and 1917 and used as Government House.

Sir Walter Davidson, then Governor of New South Wales, established Cranbrook School for boys in 1918. The school was originally organized as an Anglican boarding and day school, and was governed by a School Council consisting of eighteen clergy and laymen. The school officially opened on 22 Jul 1918, with classes being held the next day for the sixty-four students. At the opening ceremony a central feature of the ethos and identity of the School was identified - that Cranbrook School was "born in the hour of victory" and as such, its purpose should be to serve its community and be of benefit to others.

In its early years, a Cranbrook education prepared boys for professional or commercial positions. The school provided instruction in Divinity, English, Latin, Greek, Modern Languages, History, Geography, Mathematics, Physics, Chemistry and Commercial Courses. A strong House System, commencing in 1929, has resulted in a strong tradition of pastoral care for the academic, spiritual and personal life of each boy.

Cranbrook accepted junior boys from 1918, when there were nine boys enrolled between the ages of nine and twelve. Since then, junior facilities expanded with the establishment of two kindergartens (or Pre-schools) in 1944 at St Michael's Church Hall, Vaucluse and St Mark's Church Hall, Darling Point.