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.