"[5] Captains of Spanish ships from Acapulco and San Blas (Spanish west coast ports in Mexico) were in this area in 1791 and 1792 and named it Puerto del Garzon[6] in 1791 by captain Jose Maria Narvaez.

Menzies noted a number of species of birch and gave the name to the bay.

[7] In the 2000s, the development of condominiums and vacation homes became more prominent in Birch Bay due to high demand from wealthier clientele in the United States and Canada.

By 2020, Birch Bay had grown to approximately 10,000 people, making it larger than all but three cities in Whatcom County.

[8][10] The community that surrounds the bay is connected by State Route 548, a short highway that runs between two interchanges on Interstate 5 near Ferndale and in Blaine.

The shoreline has been modified in past years by the implementation of perpendicular structures called groins, and riprap.

Terrell Creek runs parallel along a section of the beach, eventually flowing into the bay.