Before the arrival of Europeans in the late 18th Century, the Cree were the dominant First Nations people in the Fort McMurray area. The oil sands were known to the locals and the surface deposits were used to waterproof their canoes. In 1778 the first European explorer,Peter Pond, came to the region in search of furs, as the European demand for this commodity at the time was strong. Pond explored the region further south along the Athabasca River and the Clearwater River, but chose to set up a trading post much farther north by the Athabasca River near Lake Athabasca. However, his post closed in 1788 in favour of Fort Chipewyan, now the oldest continuous settlement in Alberta.
In 1790 the explorer Alexander Mackenzie made the first recorded description of the oil sands. By that time, trading between the explorers and the Cree was already occurring at the confluence of the Clearwater and Athabasca Rivers. The Hudson's Bay Company and the North West Company were in fierce competition in this region. Fort McMurray was established there as a Hudson's Bay Company post by 1870, and continued to operate as a transportation stopover in the decades afterwards.
The community has played a significant role in the history of the petroleum industry in Canada. Oil exploration is known to have occurred as early as the early 20th Century, but Fort McMurray's population remained small, no more than a few hundred people. By 1921 there was serious interest in developing a refining plant to separate the oil from the sands. Alcan Oil Company was the first outfit to begin bulk tests at Fort McMurray. The nearby community of Waterways was established to provide a terminus for waterborne transportation, until 1925, when the Alberta and Great Waterways Railway reached there.
Abasands Oil was the first company to successfully extract oil from the oil sands through hot water extraction by the 1930s, but production was very low. Fort McMurray's processing output gradually
