The office has evolved over the years along with changes in administration and in United States territories.

Prior to the 1930s, responsibility for administration of United States possessions was divided among several government departments.

The Division of Territories and Island Possessions, from 1934 to 1950 was responsible for administering the Interior Department's responsibilities over the territories and island possessions of the United States that were consolidated into the Interior Department.

Under the supervision of the Secretary of the Interior, the Division served as a mediator between the territories and Federal government by performing administrative activities for the territorial governments and taking on colonization projects that furthered the interests of the United States in those areas.

The Executive Order transferred the administrative functions over Puerto Rico from the Bureau of Insular Affairs War Department to the newly formed division.

Today, the Interior Department, through the Office of Insular Affairs, continues to be responsible for the outlying insular areas including American Samoa, Guam, the U.S. Virgin Islands, and the Northern Mariana Islands.