Oak Island, on which much of the town sits, has been inhabited since the early 19th century when Fort Caswell was constructed on its east end in 1838.

The island developed slowly, but by the late 1930s it began attracting people from nearby Southport with fox hunting popular in the areas along the Intracoastal Waterway (ICW).

[11] Immediately after the new town got up and running, it began to either incorporate or obtain Extra Territorial Jurisdiction (ETJ) on properties located to its north on the mainland.

[15] Summers in the town are hot and humid with an average temperature of 85˚, although the beach front is cooled much of the time by sea breezes (the prevailing winds are from the southwest).

The fishing pier and its hotel, many businesses, and hundreds of homes were damaged, and in many places sand from shoreside dunes was pushed inland for 3 blocks.

In the succeeding weeks, a mandatory evacuation order and damage to rental properties prevented tourism, which is a major source of income for many residents.

[21] The town government operates under a Council-Manager type system where various officials have authority to make decisions on services, revenues and expenditures in accordance with a state issued charter.

The Oak Island Golf Club course and its related practice facilities are open to the public and an outdoor swimming pool is available for its members' use during the summer.

South Harbour Village has a nine-hole public golf course and a marina on the ICW with 1,000 linear feet of alongside dockage.

The Oak Island Recreation Center located mid-island provides both indoor and outdoor exercise facilities and rents out sports equipment and amenities like balloon tire, beach wheelchairs.

[35] The fourth novel of North Carolina novelist Wiley Cash, When Ghosts Come Home, is a murder mystery set in Oak Island.