During the mid to late 1700s, the Haida Indians migrated to Prince of Wales, a predominantly Tlingit area, from Graham Island in the Queen Charlotte Islands, Canada. In 1911, three Haida villages combined at the present site (Sukkwan, Howkan and Klinkwan) for their children to attend school; it was designated as the Hydaburg Indian Reservation in 1912. The new village established a trading company, store and sawmill. However, the villagers were never comfortable with the arrangement, and at their request in 1926, the land was restored to its former status as part of the Tongass National Forest. 189 acres of the land were reserved for the school and townsite disposals. Hydaburg was incorporated as a City in 1927, three years after its people had become citizens of the United States. The first fish processing plant opened in 1927, and three other canneries operated through the 1930s. When the Indian Reorganization Act (IRA) was amended in 1936 to include Alaska Natives, Hydaburg became the first village in Alaska to form an IRA Council.
A federally recognized tribe is located in the community -- the Hydaburg Cooperative Association. 89.5% of the population are Alaska Native or part Native. Hydaburg is the largest Haida village in Alaska. Residents maintain a subsistence and commercial fishing lifestyle. A totem park, developed in the 1930s, is located in the village.

During the 2000 U.S. Census, there were 154 total housing units, and 21 were vacant. 4 of these vacant housing units are used only seasonally. 90 residents were employed. The unemployment rate at that time was 31.3%, although 66.29% of all adults were not in the work force. The median household income was $31,625, per capita income was $11,401, and 24.12% of residents were living below the poverty level.

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