The area around Snug was first encountered by Europeans when Rear Admiral Bruni D'Entrecasteaux sailed up the nearby channel. Following the establishment of a colony at Hobart Town, the Snug River was discovered and named reflecting the "snug and agreeable seclusion" of the inlet. By the 1920s a port and sawmilling facilities had become established at nearby North West Bay. Subsequently around the 1840s and 1850s a small settlement was established at Snug itself.

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