Port Douglas, like many Australian regional towns, was founded to service the goldfields. In 1877, the Hodgkinson River goldfields needed a port to bring in supplies and ship out the gold. Port Douglas was not its original name, but after several attempts it was finally named in honour of the then Queensland Premier, John Douglas. The late nineteenth-century gold rush ballooned the population to 12,000, and at that time port Douglas had 27 hotels. Not only gold, but silver contributed to the town's wealth. Sugarcane, which still covers much of the coastal plain in this area, was an early crop and, along with logging the famed red cedar, Toona Australis, added to the local economy and brought labourers and fortune-hunters from all over the world.

Finally, like all the other Australian goldfields, the gold dwindled and people left the town for greener pastures. In 1911 Port Douglas was hit by a devastating cyclone and, with the effects of the reduced population, evolved into a small fishing village. It did, however, function as the port for the sugar produced at the nearby Mossman Central Mill until 1958. But by 1960 there were only 100 people left in the town. Twenty years later the tourism industry saved the town. It now has a permanent population of around 4,000 and continues to grow slowly.

Delve into the area's history with a visit to the Mossman Sugar Mill and see the historic sugar milling process, which contributed so much to the local economy. Or go further back in time to Cooktown's Discovery Festival (in June each year), which is a celebration of Lt James Cook's emergency landing for repairs to the Endeavour in 1770. The festival re-enacts the British arrival with authentic costumes and other details. A gala ball, bull riding and fireworks cap off the event.