Tourists from the mainland port of Abel Point Marina regularly visit the island.

[1] Named West Molle Island in 1881,[2] the present name "Daydream" came into use during the 1930s when Lee (Paddy) Murray, his wife Connie Murray and their best friend Charlie Hird established the first tourist resort on the island.

Notable owners include Reg Ansett, who dismantled the resort in 1953 and shipped the buildings to his new resort on Hayman Island; and Bernie Elsey, whose massive redevelopment of the island in 1967 was destroyed by Cyclone Ada three years later.

Activities like snorkeling, sail-boarding, jet-skiing, parasailing, coral viewing, scuba diving, volleyball, tennis, and badminton are popular.

Daydream island was significantly damaged by Cyclone Debbie in 2017, with the main jetty being washed away, Lovers Cove deck destroyed, the roof of the day spa ripped off, and power, water and telecommunications lost.