[5] The Skykomish people were signatories of the 1855 Treaty of Point Elliott and many were moved to the Tulalip Indian Reservation, where they later amalgamated with the Snohomish and Snoqualmie tribes.

[7] The first non-native settlers in the area were prospectors who placed individual mineral rights for claims in the Cascades, beginning with a gold rush in 1874 along Silver Creek near what later became the community of Galena.

[6] Amos Gunn, a Civil War veteran from Illinois, arrived at the fork of the Skykomish River with his wife and six children in 1889 and bought a squatter's claim to establish a homestead.

[9][14] Mines in the area yielded gold, silver, copper, and galena among other minerals, which spurred further settlement around the North Fork Skykomish River.

[12] Index was assigned a post office in November 1891 and Amos Gunn served as postmaster, delivering parcels by horseback from Wallace (now Startup) on a 12-mile (19 km) overland trail.

[7][15] The Gunns' hotel was expanded two years later to accommodate an increasing number of prospectors who arrived on the Great Northern and traveled onward towards Galena and Mineral City.

[7] The town plat for Index was filed by Amos Gunn on April 25, 1893, shortly after a controlling interest in the settlement was acquired by the Everett Terminal Land and Milling Company.

[8][16] The plat reserved 100 feet (30 m) for the main street, which had been surfaced with gravel due to frequent flooding from the Skykomish River and was sought for use for a branch railroad to Galena.

[7][12] A fire destroyed the Gunns' hotel, general store, and several residences in the town on July 22 of that year, but had not damaged the Great Northern depot.

[8] The town's buildings were rebuilt as mining activity had temporarily subsided due to the Panic of 1893 and was eclipsed by logging and farming as the main local industry.

[17] Index was also promoted as a tourist destination for sport fishing and mountaineering;[7][8] by 1905, it had five hotels and drew hundreds of visitors by train during the summer season.

[20] An unpaved county road was completed from Gold Bar to Index in 1911, which brought regular automobiles to the area and scheduled bus service.

[21] The Great Northern's local "Dinkies" trains, which made daily stops in every Skykomish Valley settlement and provided Index with passenger and postal service, was discontinued in 1925 after the highway opened.

The Stevens Pass Highway was rebuilt by the state government in 1933 and bypassed Index, which reduced tourist traffic to the town and caused several businesses to close.

[17][22] The town's major industries saw reduced business during the early years of the Great Depression, which resulted in the shutdown of lumber mills and mines in the area.

A Civilian Conservation Corps camp was established east of Index in 1934 to provide jobs for unemployed men and improve lands owned by the United States Forest Service in the Cascades.

[17] Index entered a period of economic stagnation and reduced employment following the Great Depression and World War II, as most of its industries had closed and were not replaced.

[14][28] From 1962 to 1964, Great Northern rebuilt its railroad through Index on an embankment with a wider curve that cut off several streets and split the town into two halves.

[17][30] A replacement of Index's wooden water main and reservoir system, which are supplied by a mountain spring, began in 1967 and was completed a decade later by the town government using federal and state grants.

[35][36] Much of the town was damaged by a major flood in December 1980 that washed away eight homes and the water main for Index;[37] buildings and roads were later rebuilt by residents.

[41] The Index Town Wall was the site of a drilling experiment in 1984 for a local company that planned to supply a new machine to an Australian diamond mine.

[50] The Town Walls are a series of granite cliffs in Forks of the Sky State Park that rise 360 to 600 feet (110 to 180 m) above the valley and are popular with rock climbers.

[50] The mountains around Index are primarily batholiths that formed from cooled magma lifted to the surface approximately 34 million years before present.

[3][64] The town also has seasonal residents living in vacation homes or other accommodations, bringing the area's population to an estimated 500 people during the summer months.

[7][83] The Red Men Hall, a fraternal lodge and the largest building in Index, was constructed in 1903 and served as the center for social life in the town.

[95] Index lies along the Cascade Loop Scenic Byway and is 30 miles (48 km) west of Stevens Pass, which has a ski area and other winter activities.

[98] Non-profit climbing groups have also purchased parcels near the Town Wall for recreation and conservation, including donations to expand the state park.

[36] The surrounding area also includes several hiking trails maintained by the United States Forest Service and the Snohomish County Parks & Recreation Department.

[119] The PUD's plan to build an inflatable dam near Sunset Falls east of Index was abandoned in 2018 due to opposition from environmentalists and local residents, who sought a wild and scenic designation for the river.

[120][121] Natural gas for the town's residents and businesses is provided by Puget Sound Energy, a private company that serves most of the Seattle metropolitan area.