Helgøy grew as a trading post under Christian Figenschou, but residents soon became dissatisfied with the municipal government based in Karlsøy.

Despite being separated, the two municipalities still had a common priest, sheriff, and doctor, but all these were residents in Karlsøy.

After 1886, residents began developing a local town center on Helgøya island, with Helgøy Church, a rectory, a farm, and flourishing trade.

A small village grew up around the church site and a permanent school in the parish was added on Helgøya island.

During the 1960s, there were many municipal mergers across Norway due to the work of the Schei Committee.

On 6 January 1908, a royal resolution changed the spelling of the name of the municipality to Helgøy.

It was part of the Karlsøy prestegjeld and the Nord-Troms prosti (deanery) in the Diocese of Nord-Hålogaland.