Founded in 1784 by Loyalists, Marsh Harbour spent many years as a logging, sponging and " wrecking " town, with boat-building as a secondary industry. These days, tourism has replaced logging as the town's major source of income, and its marinas are now lined with expensive yachts and surrounded by the swank vacation homes and retirement castles of a new breed of North American expatriates.

For the most part, Marsh Harbour is a quiet place, its nightlife restricted to a few local bars and lounges and most of its activity taking place at the resorts near the harbour , where Albury Ferry Dock transfers tourists to boats journeying out to the Loyalist Cays. The town's only conventional "sight" is an exotic yellow edifice known as Seaview Castle , the creation of one Evans Cottman, an author and doctor who settled here in 1944, building this crenellated fantasy as his home. Nearby Bay Street , along the harbour, offers a pleasant walk, and leads to an area known as Dundas Town , inhabited mostly by Bahamians of African descent, as well as a number of Haitian immigrants. Don McKay Boulevard is the town's major thoroughfare, home to a number of shopping centres, travel agencies, fast-food joints, ice cream shops and even a few authentic Bahamian restaurants as well.