The village was established in the 19th century as the halfway point in the Grand Trunk Railway, an international railroad connecting Portland, Maine and Montreal.

Island Pond was a major service center for the railroad, and became a commercial hub of northeastern Vermont.

Over the next twenty years, the town's population rose from under 200 to more than 1,500, with many of the new residents somehow involved in the operations of the railroad.

[2] The historic district encompasses a large part of the northern section of the village of Island Pond.

Most of the district's buildings were built in the half-century following the railroad's arrival in 1853, and are of vernacular wood-frame construction.