The Port Douglas township was established in 1877 after the discovery of gold at Hodgkinson River by James Venture Mulligan. It grew quickly, and at its peak Port Douglas had a population of 12,000 and 27 hotels. With the construction of the Mulligan Highway it serviced towns as far away as Herberton.
When the Kuranda Railway from Cairns to Kuranda was completed in 1891, the importance of Port Douglas dwindled along with its population. A cyclone in 1911 which demolished all but two buildings in the town also had a significant impact. At its nadir in 1960 the town, by then little more than a fishing village, had a population of 100.
In the mid-1980s, tourism boomed in the region after investor Christopher Skase financed the construction of the world-class Sheraton Mirage
