The region was inhabited by Inuit (Eskimos) and various Indian tribes when explored by Europeans in the 16th century. In 1670, the eastern part, known as Rupert's Land, came under control of the Hudson's Bay Company, a fur-trading venture. In 1779, fur-trading to the south and west of Rupert's Land was begun by the North West Company. Its lands became known as the Northwestern Territory. Alexander Mackenzie, a company trader, discovered the Mackenzie River in 1789. In 1821, the North West Company was absorbed by the Hudson's Bay Company.

In 1869, the Canadian government took over the Hudson's Bay Company's lands, and the following year Rupert's Land and Northwestern Territory were joined to form the Northwest Territories. Portions of this land later became parts of provinces and of the territory Nunavut.

During the 1930's mining developed in the region. Exploration for oil and natural gas was begun in the 1970's, but the deposits found were not large. A proposal to create a new self-governing territory from a part of the Northwest Territories was approved by the legislature in 1987 and by voters in 1992. In April, 1999, the new territory, called Nunavut, officially came into being.