Early inhabitants were the Athabascan Dena'ina Indians. Around 1899, the Boston and Klondike Company made the first sled trail north into the Talkeetna Mountains from Knik via Big Lake. Homesteaders in 1929 and after World War II settled Big Lake. Materials were transported from Pittman railroad station over eleven miles of rough trail. By 1959, a number of lodges and several children's camps were operating on the lake, and at least 300 cottages and camps were owned by individuals. Lake-front lots became accessible in the 1960s and 1970s, with the expansion of roads and power. In June 1996, the "Miller's Reach" wildfire destroyed more than 37,500 acres in the Big Lake and Houston area, including 433 buildings and homes valued at $8.9 million. Low housing costs, the semi-rural lifestyle, and a 45-minute commute to Anchorage have supported growth in the Mat-Su Valley.
10.6% of the population are Alaska Native or part Native. Boating and fishing are extremely popular on the lake during the summer months. High school students attend Houston Jr./Sr. High School.

During the 2000 U.S. Census, there were 2,122 total housing units, and 1,151 were vacant. 1,024 of these vacant housing units are used only seasonally. 1,068 residents were employed. The unemployment rate at that time was 13.52%, although 47.05% of all adults were not in the work force. The median household income was $43,382, per capita income was $19,285, and 14.57% of residents were living below the poverty level.

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