[8][9] The name Ōtākou is thought to come from Māori words meaning either "single village" or "place of red earth".

[10] Prior to the arrival of European settlers, the place was a prominent Māori settlement, and it is still the site of Otago's most important marae (meeting ground).

By the early 19th century, the three Māori iwi of Ngāi Tahu, Kāti Māmoe and Waitaha had blended into a single tribal entity.

In December 1817 the Sophia, a Hobart sealing ship captained by James Kelly, anchored in the waters of the harbour near Otakou.

The survivors rowed back to the Sophia but, according to Kelly's account of the event, found her boarded by Māori from Otakou and retook her in a bloody fight.

It is a marae of Ngāi Tahu and the branch of Te Rūnanga o Ōtākou, and includes the Tamatea wharenui (meeting house).

[20][21] Otakou is located close to Taiaroa Head, the site of an albatross colony and other wildlife such as seals and penguins.