The village was established in 1986 by Inuit from Kuujjuarapik, 160 km to the south, who decided to relocate away from the area affected by the James Bay Hydro-electric Project.

Umiujaq is the closest community to Tursujuq National Park, which was officially opened on July 18, 2013, and covers 26,106.7 km2 (10,079.9 sq mi).

The village is located 15 km (9.3 mi) west of Richmond Gulf (French: Lac Guillaume-Delisle; Inuttitut: Tasiujaq (which resembles a lake)), an immense inland bay which is joined with Hudson Bay by a rocky gulch.

Following a referendum, in 1982 the Inuit opted to create a new community where they could preserve their traditional lifestyle in an area where fish and game were not threatened by hydro-electric development.

After extensive studies a location was selected, and construction of the new village was completed in 1986.