The community is near the headwaters of the North Fork Siuslaw River in a valley in the foothills of the Central Oregon Coast Range.

[2][5] Lorane was settled by white settlers who participated in the US expansion Westward to Oregon, encouraged by the Donation Land Claim Act of 1850, which gave 320 acres of free land to any unmarried white male citizen, or 640 acres to every married couple, who moved to the Oregon Territory before December 1, 1850.

[6] First settler contact in Lorane is thought to have occurred in the early 1850s, with significant colonial landmarks being the Applegate Trail, a stagecoach route, the Cartwright House (Mountain House Hotel), and the original landscape intended for the Southern Pacific Railroad.

[7] The indigenous keepers of the land that Lorane occupies are the Siuslaw people, who are believed to have arrived to the Oregon coast over 9,000 years ago.

[8] They spoke the Siuslaw language, but the last documented speakers of Siuslawan were the Barrett family and Billy Dick of Florence, who were interviewed in the 1950s.