Magadan was founded in 1929 on the site of an earlier settlement from the 1920s. During the Stalin era, Magadan was a major transit center for prisoners sent to labor camps. From 1932 to 1953, it was the administrative center of the Dalstroy organization�a vast and brutal forced-labor gold-mining operation and corrective labor camp system. The town later served as a port for exporting gold and other metals mined in the Kolyma region. Its size and population grew quickly as facilities were rapidly developed for the expanding mining activities in the area. Town status was granted to it on July 14, 1939.
Magadan was temporarily transformed into a Potemkin village to mark an official visit by U.S. Vice-President Henry Wallace in May 1944. The watchtowers had been temporarily taken down and the prisoners were locked up, while a model farm had been set up for Wallace's inspection. He took an instant liking to his secret policeman host, admired handiwork done by prisoners, and later glowingly called the city a combination of Tennessee Valley Authority and Hudson's Bay Company. Wallace's naivete discouraged the Democratic Party of the United States from renominating him as vice president later in the summer of 1944, helping lead to the selection of Harry Truman in his place. Truman later became President of the United States, and Wallace retired to obscurity. Eight years later Wallace apologized for not having understood the true situation at Magadan
