When Gustav III (1746–92) took over power in 1771, the Navy Yard entered a new period of prosperity.

The first decades of the century had seen a change in the military balance in the Baltic. Russia had extended her borders to the Gulf of Finland where she established the future capital of Saint Petersburg and the naval base of Kronstadt, and in 1748 Sweden began to build the Sveaborg fortress outside Helsinki to protect her eastern frontiers. The Swedish Navy was reorganised in two parts, the Main Fleet based on Karlskrona and the Archipelago or Army Fleet, based in Stockholm and at Sveaborg.

A major problem was that warships had a relatively short working life, a difficulty the Navy tried to resolve by the construction of huge dry docks in which ships could be built, repaired or simply stored there during the winter months.

In 1782 a new era was ushered in at the Karlskrona Yard when Fredric Henric af Chapman was appointed Admiral Superintendent and commissioned to create a completely new fleet for Gustav III’s coming war with, as it turned out, Russia. Chapman, who came from an English family of shipwrights, was born in Göteborg on the west coast of Sweden. He had studied at French, Dutch and English shipyards and in Finland acquired a sound knowledge of the wood and timber needed in shipbuilding. Chapman brought new mathematical methods to ship design, and had previously worked with Augustin Ehrensvärd at the Swedish bases of Stralsund and Sveaborg where he had built new types of vessels for the galley fleet. Chapman had previously built various ships for the Navy as well as drawn up plans for the major warships that would later be launched in Karlskrona.

As Admiral Superintendent, Chapman reorganised the entire shipbuilding process at the dockyard. He introduced the principles of standardised production and the amazingly short time of three years saw the construction of no less than 10 ships of the line and 10 frigates. Until then it had taken several years to build but a single vessel.

In 1784 Augustin Ehrensvärd’s son, Admiral Carl August Ehrensvärd, was appointed C-in-C of the Karlskrona Naval Base. A man of letters, well versed in philosophy and art history, he had travelled to Italy where he had been inspired by the classical ideals of Greek and Roman architecture and together with Chapman he created several impressive buildings at the Navy Yard. These included the Plans and Ships’ Models building, the Sculptors’ workshop and the No. I Storehouse.