The whole of the Northern Territory came within the jurisdiction of the Diocese of Carpentaria from the turn of the century until 1 March 1968 when the Diocese of the Northern Territory was inaugurated and Bishop Kenneth Mason was Enthroned as the first Bishop of the Northern Territory.

The Diocese of the Northern Territory remains part of the Province of Queensland and covers an area of approximately 1,346,200 sq. kilometres.

Bishop Mason's Enthronement took place in the old Christ Church, Darwin, which became the Cathedral for the new Diocese. This building was destroyed by Cyclone Tracy on Christmas Day 1974. Only the entrance porch of the Cathedral remained and this is now incorporated in the new Christ Church Cathedral, which was consecrated on 13 March 1977 in the presence of the Archbishop of Canterbury. When Bishop Mason was Enthroned there were four parishes and the CMS missions in Arnhem Land. Bishop Mason resigned in 1983 on being appointed Chairman of the Australian Board of Missions.

Bishop Clyde Wood, who had been the Dean of the Cathedral since February 1974 was elected to be the second bishop of the Northern Territory. He was Enthroned on 18 October 1983. Bishop Wood's Episcopate saw the emergence of an indigenous Aboriginal church in Arnhem Land in place of the former missions. Bishop Wood ordained Aboriginal clergy for each of the six Aboriginal parishes in Arnhem Land.  Bishop Wood resigned in 1991 in order to become an Assistant Bishop in the Diocese of Brisbane with responsibility for that Diocese's Western Region. In 1996 he became the Bishop of North Queensland.

Bishop Richard Appleby, who had been Auxiliary Bishop of Newcastle since 1983, was elected third Bishop of the Northern Territory and was Installed and Recognised in Christ Church Cathedral on 29 February 1992. Bishop Appleby's episcopate was notable for the growth of parish ministry across a number of the regions of the diocese; large numbers of adults were baptised and confirmed at Groote Eylandt, and construction of St Paul's Church Katherine after the Australia Day flood of 1998. A major restructuring of diocesan resources occurred during this time, which enabled the 1999 Synod to signal its desire for the diocese to be regarded as self-supporting by the national church. Bishop Appleby resigned in June 1999 on being appointed Bishop of the Northern Region in the Diocese of Brisbane.

Bishop Philip Freier was consecrated in St John's Cathedral Brisbane on 22 July followed by his installation as fourth Bishop of the Northern Territory in Christ Church Cathedral on 13 August 1999.

Bishop Philip oversaw the amalgamation of Anglicare Top End and Anglicare Central Australia to form Anglicare NT. The Church of the Good Shepherd at Fred’s Pass was consecrated in 1999, and both the Anglican Church at Tennant Creek and Katherine entered into a mutual ministry agreement with the Lutheran Church.

The Cursillo movement in the Diocese broke new ground with joint men’s and women’s Cursillo attracting a number of Indigenous Cursilistas.

Bishop Philip’s ministry to, and support of, Aboriginal clergy and remote communities was especially enhanced by ordinations and services in local language and customs.

Bishop Philip resigned from the Diocese in December 2006 to take up the position of Archbishop of Melbourne.