[2] Records show that Indian Bay was the only inhabited settlement in that region that was connected to the mainland part of the Island of Newfoundland until the 19th century.

It was also known as Northwest Arm, and later for a period of time, as Parson's Point, after the surname of its first English settlers.

The 1836 Census of Newfoundland records Indian Bay as having a population of five, William Parsons and his family.

In 1921 the "International Power and Paper Co." arrived in Indian Bay and that same year a school was constructed.

[2] Indian Bay is well known for its sports fishing, mainly for Brook Trout and Atlantic Salmon.