The first recorded European to set eyes on Streaky Bay was the Dutch explorer Peter Nuyts whose ship Gulden Zeepard passed off-shore in 1627, but it was left to Matthew Flinders to inscribe the name on a map in 1802.
He named the Eyre Peninsula bay for the discoloured water which he assumed to be caused by the outflow of a large river but which scientists later figured was from an oil oozing from seaweed.
The town has played an important role as a port and commercial centre for a wool and wheat producing hinterland and, increasingly in modern times, as a major fish producer and coastal resort. The commercial fishing bounty is based on King George whiting, crayfish, abalone and shark, with profitable side catches of salmon, snapper, garfish, snook, tommy ruff, trevally, squid, crabs and scallops.
The town’s first building, Hospital Cottage (1864), is now a private residence. Small seaside villages to the north attract their share of swimmers and anglers, but Perlubie Beach holds all the tourist cards on New Year's Day when it hosts Australia's most unusual race meeting. Raced over a 1600-metre, beach course at low tide, the unique event has been held every year since 1913, and the permanent stands and saddling enclosure stand empty for all but the Big Day.