The area now known as Dunvegan has been a gathering place for Indigenous peoples for thousands of years and is located on the traditional lands of the Dunne-za (Beaver) people.

In 1805, the North West Company established Fort Dunvegan, a fur trading post. In 1821, Fort Dunvegan became a Hudson's Bay Company post. In 1867 a Roman Catholic mission, St. Charles, was founded and in 1880 an Anglican mission, St. Saviour's, was founded. The Dunvegan valley was also home for a time to the local legend Henry Fuller "Twelve Foot" Davis and The Revillon Freres company.

After the fur trade posts and missions closed down at Dunvegan in the early 1900s, the area was looked after by locals, most notably the local chapter of the Knights of Columbus.

Market gardens began operating in the valley in the 1940s, in 1956 the site became a provincial park, and in 1960 a suspension bridge replaced ferry service. A provincially operated campsite has been developed and an interpretive centre is open seasonally to the public.