This starbase was newly established in 2365 in order to support the fleet in the area and show a maintained presence close to the Neutral Zone border. It was under the command of Vice Admiral Nakamura. The station also had an office of the Judge Advocate General headed by Captain Phillipa Louvois. The station had an office of the Daystrom Institute to which Commander Bruce Maddox was assigned.
In 2365, the USS Enterprise-D visited Starbase 173 for port call. During this call, a scheduled crew rotation occurred and experimental modules were off-loaded to the starbase.
A hearing was conducted by Louvois on the question of whether Lieutenant Commander Data was the property of Starfleet and therefore not permitted to resign. After arguments by Jean-Luc Picard and William T. Riker, she ruled that Data is not property, and had the right to make the same choices other Starfleet officers make. (TNG: "The Measure Of A Man")
According to Star Trek: Star Charts (p. 67) and Stellar Cartography: The Starfleet Reference Library ("Federation Historical Highlights, 2161-2385"), Starbase 173 was located in the Beta Quadrant.