[1] The lake is named after Frank F. Payne, an English-born meteorologist who explored and operated a weather station in the Hudson Strait area in the 1880s.

[4] In 1948, the first European expedition to reach Payne Lake discovered ruins that they attributed to the Dorset culture.

In 1965, Thomas E. Lee re-investigated the ruins and advanced the theory that they were of Norse pre-Columbian origin.

Lee's interpretation of other sites on the Ungava coast as being Norse settlements has been rejected by other archaeologists, who have found that they are more plausibly associated with the Dorset.

[5] The evidence Lee presented from the Payne Lake excavations has been described by others as either being equally indicative of Norse or Inuit origin, or wholly inconsistent with known patterns of Norse settlement.