1886
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- In response to the Napier Commission Report, the Crofters Holdings Act of 1886 was enacted to give the tenants security of tenure, the right to judicially reviewed fair rents and the right to be compensated for improvements at the time they leave their holdings.
- St Ringan's Church was built. On the 6th of March 2002, the building became the public library in Lerwick.
- Arthur Laurenson's "Diplomatarium Hialtlandense, documents relating to the Shetland Islands from the xiiith century" published by C. & A. Sandison, Commercial Street, Lerwick.
- The Fishery Board of Scotland tallied up a fleet of 840 herring boats fishing out of the Shetland District, 400 belonging to the district and 440 from the south, with 504 fishing from the Lerwick section and 336 from the Unst section. Stormy weather delayed and shortened the season resulting in half the catch of the previous year. In aggregate, the catch was 124,000 crans, averaging 147 per boat, and yielding 198,051 barrels cured. The fishery employed 8,224: 5,195 fishermen & boys, 380 coopers, 2,545 gutters and packers and 104 laborers.
Shetland fielded 21 ling and cod boats of 1,055 tonnage, crewed by 237 men. Their catch was 1,569,893 fish. 16,275 cwt were dried aboard ship and 44,792 on shore, for a total of 61,067 cwt., about half the total for all of Scotland.
January
- 30th
Betty Mouat set adrift in the smack Columbine. She was to drift for 9 days across the North Sea and come ashore on a beach at Lepsøy, Norway.
June
- 23rd
- There were three important events in Lerwick on this day.
First was the laying with full Masonic Honours of the foundation stone of the The Grand Hotel followed later on by similar ceremonial at the 'Poor House' (later re-named County Homes, then Brevik Hospital and now Brevik House) and finally, the new harbour works at Victoria Pier were opened.
July
- 26th
The Tib Doig, a smack operating as a smuggler, of Ostend, Belgium, carrying tobacco and gin, drove from anchor while sheltering and wrecked in Ham Voe, Foula. All of the crew were saved.
August
- 26th
The Monarch, a wooden hulled sail fishing lugger, of Pitullie, Aberdeenshire, Scotland, while on a fishing trip out of Lerwick foundered and sank at a position approx 9 miles S of Bressay.
September
- The Sovereign (1886), a packet boat, laden with a mixed cargo, of and for Lerwick, from Aithsvoe, Cunningsburgh wrecked at the entrance of Aithsvoe.
- 28th
The North Star (1886), a fishing vessel, of Lerwick, drove from anchor and wrecked on a baa at Ham Voe, Foula. All of the crew were saved.
November
- 11th
Author William Porteous born at Ollaberry
