Extending about 10 miles (16 km) into the Lower Peninsula of Michigan, much of the head of the land surrounding Little Traverse Bay, and has become part of the urban areas of Petoskey and Harbor Springs.

Harbor Springs, a settlement on the bay, originated as L'arbre de Croche, (Crooked Tree) a French Jesuit mission village to serve the Odawa people bands in the area.

[2] After the Odawa bands in northern Michigan were persuaded to cede considerable lands to the United States, the Little Traverse Bay region was developed by Illinois land developers and resort founders, such as lawyers Henry Stryker III and Henry Brigham McClure, and the Capps family of Jacksonville, Illinois and woolen mills fame.

The Stryker, Capps, and McClure families were interconnected with the Jacob Bunn industrial dynasty of Chicago and Springfield, Illinois.

The bay is the location of the annual Ugotta Regatta, hosted by the Little Traverse Yacht Club in Harbor Springs.