The settlement at Destruction Bay does not date from the KLONDIKE GOLD RUSH, but rather from 1942 when it was established by the US Army as a highway construction camp. These camps were located at intervals of about 160 km (100 miles) and were intended both to house construction workers and to serve as rest, fuel and repair stops for trucks and drivers using the Alaska Highway. The name, Destruction Bay, refers to an incident that befell the camp. Shortly after its construction a storm with high winds almost destroyed the camp.
Today, the community depends heavily on tourism. Visitors are attracted to the area by the Alaska Highway and nearby KLUANE NATIONAL PARK.