In 1786, Pytor Zaykov built Nikolaevskaia krepost (Fort Nicholas) for the Lebedev-Lastochkin Company on the site of modern Kenai, being the first European settlement on the Alaskan mainland.

[8] Hostilities surfaced between the natives and settlers in 1797, culminating in an incident in which the Dena'ina attacked Fort St. Nicholas, later dubbed the battle of Kenai.

In 1869, after the Alaska Purchase, the United States Army established a post called Fort Kenay.

Canning companies were established and helped fuel the commercial fishing boom that was the primary activity through the 1920s.

The Kenai River Working Group (KRWG) was formed to address the issue of water pollution.

Winters are snowy, long but not particularly cold, especially considering the latitude, with January featuring a daily average temperature of 15.8 °F (−9.0 °C).

Snow averages 63.6 inches (162 cm) per season, falling primarily from October through March, with some accumulation in April, and rarely in May or September.

The Warren Ames Memorial Bridge, located within city limits and the Kenai River's farthest downriver crossing, provides access to the portions of city limits south of the river and to Kalifornsky Beach Road, the latter providing an alternate access to Soldotna and the outlying road network.

There are docks for offloading the catch, but commercial fishing boats are generally moored offshore in the Kenai River.

The nearest deep water port is in Nikiski, but is primarily reserved for use by the oil and gas extraction industry.

In 1985, a world record largest sport-caught Chinook (or "king") salmon was taken from the Kenai River, weighing in at 97 lbs 4oz.

Eight of the ten largest king salmons caught in the world have come from the same river, making the city a popular fishing tourist location.

[23] The lower reaches of the Kenai River, including its mouth where it empties into Cook Inlet, are within city limits.

[24] Because the fishery is easily accessible and open to all Alaska residents, participation has grown over time, creating a significant strain on city resources as they deal with litter, fish waste, fire hazards and other issues associated with having in excess of ten thousand extra persons in the city during this period.