John LaRue moved from South Manitou Island to the area of the Sleeping Bear Bay that would eventually become the town in 1848.

After establishing a trading post, subsequent settlers began to move to the area with one, Mrs. John E. Fisher, giving the town the name "Glen Arbor" in 1854.

Additionally, George Ray built a dock in 1856 and became the settlement's first postmaster and W. D. Burdick established a sawmill and grist mill nearby in 1864.

The increase of maritime traffic and the constant threat of shipwrecks along the Manitou Passage led the U.S. Life-Saving Service to establish a small boat station at Sleeping Bear Point in 1901.

South Manitou Island is administered by the National Park Service, but is politically part of Glen Arbor Township.