The area was first settled and founded in 1869 by George Hunt, who built a small agricultural centre there. In 1870, a post office was built and the area was named Huntsville after Hunt, who became the first postmaster. Huntsville's economic development was stimulated by the engineering of a navigable water route north from Port Sydney to Huntsville which opened in 1877. A railway route from Gravenhurst was built by the Northern and Pacific Junction Railway in 1885, which encouraged development and resulted in Huntsville becoming officially incorporated in 1886.
In the following year, the Muskoka Colonization Road reached this area. The central Ontario community became an important industrial area in the late 19th century and had several saw, planing and shingle mills, as well as a tannery. Today, the many lakes and hills in the area, combined with the town's proximity to both Algonquin Park and Toronto, make Huntsville and the Muskoka region a major tourist destination.
Late one foggy night two boaters collide head on while trying to navigate a narrow inlet channel. Both their boats were damaged, disabled and slowly sinking. As they each watched their boats slowly slip away beneath them, the first boater said " You know, this is a sign that we should never take life for granted and that we should live it to the fullest". "You are right," said the other boater as he opened a cooler and pulled out a bottle of bourbon whisky. “Let's drink to living well for the rest of our lives.” The first boater took the bottle and, after a big swig, handed it back to the other boater who in turn quickly threw it into the river. More than a little surprised the first boater exclaimed " You didn't take a drink!?" "Naw", said the other boater "I think I'll just wait for the Coast Guard to show up."