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McCaig's Tower, or Folly, was built over a three year period beginning in 1897 by John Stewart McCaig, a wealthy local banker. His interest in Roman & Greek architecture led him to model it on the Colosseum. His aim was to provide work for local stonemasons during a time of high unemployment, also for it to be a lasting monument to his family.

The original plan envisaged a large tower in the middle, surrounded by statues of his family. However, the project was curtailed by McCaig's death. He had made provision in his will for the work to continue, but this was successfully challenged by his sister, and so the building was never completed. The 2 feet thick, 40 feet high walls now encompass a public garden, from where may be seen stunning views of Oban and the bay.