The history of Traverse City, Michigan is a long and winding path from a wild, unsettled pioneer town to a modern city with an impact on the United States economy, with economic activities ranging from being one the best places to retire to in the United States to being the single largest producer of tart cherries in the country. The small town is located on the Grand Traverse Bay, from which it gets its name, a long and entirely natural harbor from the waters of the larger Lake Michigan area. This natural advantage in the world of water going travel has played a major part in the city's economic and cultural growth over the past century and a half of the town's existence.

For some centuries the land was a seasonal territory of the First Nations of the region. Typically during the summer, these nations would live in the area and head south in the winter. Because multiple countries moved in and out of the region over the course of centuries, it found itself becoming a major center point of the cross-cultural exchange known as the Hopewell Indian exchange system that would play a major role in the development of the First Nations of the Great Lakes region. Over the centuries, there were some conflicts between the nations that claimed the territory, of particular note being a particularly intense struggle between the Ottawa and the Mush-co-desh estimated to have happened around the 1400s.

In the 1800s, after two centuries of nomadic traders and trappers moving through the region as part of the larger colonial economic activities of the area, people began to settle into the region permanently to further these trading systems. In the Grand Traverse Bay, where the city is at the head of, French sailors mapped the area, but it was not until 1839 when a truly permanent settlement indeed emerged. Located on the Old Mission Peninsula, Reverend Peter Doughtery started a permanent settlement that attracted a handful of settlers to the region to try and transform the Bay and its surrounding areas into profitable agrarian farms. Progress in this endeavor was initially very slow, and for almost a decade, the mission on the peninsula was the only real settlement of note.

In 1847, Captain Boardman, a business man of some note in the region of the time, bought the land at the west end of the bay and during that year, the captain and his son and employees established a dwelling and later a sawmill near the mouth of the river to facilitate the process of building a new settlement. In 1851, the Boardman family sold the sawmill to a concern known as the Hannah, Lay, and Co. (which at the time consisted of Albert Tracy Lay, Perry Hannah, and James Morgan) who made a lot of improvements to the sawmill. Settlers, seeing the increased investment in the region, were drawn to the new community that was beginning to establish itself in the Grand Traverse Bay area.

In 1853, Albert Lay succeeded in getting the federal government in Washington D.C. to authorize a new post office in the new settlement he had invested so much in. Because there was already a post office at Old Mission on the peninsula, the new settlement needed to be distinguished from the Old Mission settlement. Initially known as "Grand Traverse City" the new settlement was later officially named "Traverse City" to prevent confusion between the newly established settlement and the older settlement on Old Mission Peninsula. The name has persisted over the past century and a half.

In 1872, rail service finally arrived in Traverse City, connecting the small settlement to the larger network of railroad lines that were rapidly connecting the post-Civil War United States, particularly in far-flung territories like Michigan. The railroad spur that established the town's railroad was the Traverse City Rail Road Company spur which sprouted from the Grand Rapids and Indiana Railroad line which was connected to Walton Junction. Once the small town was attached to the rest of the country by the expanding network of railroad lines, the region was opened up to further settlement by newcomers and industrial development for investors in the area.