Previous names for the town included Terrigal, Island Point, Port Owen and Salisbury. The town is situated adjacent to two World Heritage areas, the Great Barrier Reef and the Daintree Rainforest.
Port Douglas was No. 3 on Australian Traveller magazine's list of 100 Best Towns In Australia.
The town is within the Federal electorate of Leichhardt, and within the State electorate of Cook. At local level, It is within the local government area of Shire of Douglas (between 2008 and 2013, it was within the Cairns Region).
The Port Douglas township was established in 1877 after the discovery of gold at Hodgkinson River by James Venture Mulligan. Port Douglas Post Office opened on 1 September 1877. It grew quickly, and at its peak Port Douglas had a population of 12,000 and 27 hotels. With the construction of the Mulligan Highway it serviced towns as far away as Herberton.
When the Kuranda Railway from Cairns to Kuranda was completed in 1891, the importance of Port Douglas dwindled along with its population. A cyclone in 1911 which demolished all but two buildings in the town also had a significant impact. At its nadir in 1960 the town, by then little more than a fishing village, had a population of 100.
The Port Douglas War Memorial was unveiled on 10 February 1923 by Mrs Tresize.
In the late-1980s, tourism boomed in the region after investor Christopher Skase financed the construction of the Sheraton Mirage Port Douglas Resort.
Port Douglas has a number of heritage-listed sites, including:
On 5 July 1943, a RAAF Vultee Vengeance (Serial Number A27-217) crash landed on the beach near Port Douglas.
In November 1996 United States President Bill Clinton and First Lady Hillary Clinton chose the town as their only holiday stop on their historic visit to Australia. When dining at a local restaurant they witnessed a couple's wedding certificate. On a return visit on 11 September 2001, Clinton was again dining at a local restaurant, when he was advised of the September 11 attacks. He returned to the United States the following day.
On 4 September 2006, television personality and conservationist Steve Irwin died at Batt Reef, off Port Douglas, after a stingray barb pierced his heart during filming of a documentary called The Ocean's Deadliest. Irwin was filmed snorkelling directly above the stingray when it lashed him with its tail, killing him almost immediately. The event was widely reported in Australia and overseas.
The annual Port Douglas Carnivale is held in May and runs for 10 days over two weekends, beginning with a parade attracting over 10,000 people. In October, the Sunset in the Park Music Festival and Porttoberfest (a play on Oktoberfest) are held. The Great Barrier Reef Marathon Festival is also held during October.
Port Douglas was a popular location to view the 14 November 2012 solar eclipse that occurred at 6:38 am (local time). Thousands travelled to Port Douglas to see the phenomenon.
The music video for Kylie Minogue's 1988 single "It's No Secret" was filmed in Port Douglas.
Port Douglas has a tropical monsoon climate according to Köppen climate classification (Am), with hot summers and warm winters, with heavy rainfall primarily occurring from January–March, the wettest month of the year typically being February. The average temperature of the sea ranges from 23.7 °C (74.7 °F) in July to 29.5 °C (85.1 °F) in January.
Kitesurfing is popular at the southern end of Four Mile Beach, particularly during the winter months when trade winds blow from the South.
Port Douglas is near the Great Barrier Reef. Numerous companies run daily trips from the marina to the outer reef and the Low Isles for scuba diving and snorkelling. Port Douglas is also well known for its many restaurants, walks, golf courses, and five star resorts.