The first European settler to claim land was French-Canadian fur trader Louis Chevalier, and he established a trading post slightly upstream along the Au Sable River, which was translated from the French language "river of sand."

In 1848, the township was established, and the community of Au Sable was platted in 1849 at the river mouth along Lake Huron.

[5][6] The community of Au Sable became the center of population and incorporated as an autonomous city in 1889.

After the lumber industry declined, the population dwindled, and Au Sable and Oscoda suffered a devastating fire in 1911.

[5][6] Due to its location along the Au Sable River and Lake Huron coastline, a lighthouse was established at the river mouth to aid ships that were used to transport the large lumber supplies.

It was eventually restored and erected near U.S. Route 23 at the Huron Shores Artisan Hall just to the north in Oscoda Township.

Au Sable Township is served by two separate public school districts.

The majority of the township is served by Oscoda Area Schools to the north in Oscoda, while the southwest corner of the township is served by Tawas Area Schools in Tawas City.