In 1865, an Arab–Malay group led by Nayuda Ahmed, traveling and collecting sea products around Mergui Archipelago started a base and village at the bay of Victoria Point.

In 1872 the third mayor of Mergui District, Sir Ashly Din (1870–1875), assigned the first police officer to be stationed at Maliwan, a village 24 miles north of current Victoria Point.

The majority of Kawthaung's population is made up of Bamar, Thai and other ethnic minorities such as the Shan, Karen, and Mon.

Most of the Bamar, Thai, Shan, Karen, Mon, Burmese Chinese and some portions of the Salone adhere to Theravada Buddhism.

Tourism is bound to play a larger role for the local economy in the future as Myanmar's government is gradually lifting travel and immigration restrictions in the area.

Since September 2013, tourists entering the country through Kawthaung are able to continue their journeys on land and exit through any other border crossing.

When crossing with a Thai passport, a visa must be applied for in advance since the related bilateral agreement between Thailand and Myanmar has exceptions only when arriving through an airport.