The Port of Port Townsend sits on the northeastern tip of Olympic Peninsula in Washington State. The Port of Port Townsend is located about 33 nautical miles (50 kilometers or 31 miles east) from Port Angeles, also on the Olympic Peninsula. The Port of Port Townsend is about 40 nautical miles (64 kilometers or 40 miles northwest) across Puget Sound from the Port of Seattle. The 2010 US Census reported that more than 9100 people call the Port of Port Townsend home.

The Port of Port Townsend is the seat of Jefferson County and one of only three Victorian era seaports in the United States. Port Townsend is known for its many Victorian houses and buildings that are part of the registered waterfront Port Townsend Historic District. The largest employer is the Jefferson Healthcare hospital, and the biggest private employer is the Port Townsend Paper Mill. The maritime trades are important to the Port of Port Townsend economy, as are manufacturing, timber, and tourism.

Before the first Europeans came to the future Port Townsend area, the Nux Sklai Yem, or S'Klallam, populated an area stretching from the coast of British Columbia to northwest Oregon. They had lived in what would become the Port of Port Townsend since 1400 AD. Enjoying the abundant natural resources of the region, the S'Klallam lived in permanent villages and moved during warm weather to fish, hunt, and gather.

In 1792, the HMS Discovery sailed into Discover Bay to the about ten kilometers (six miles) west of the future Port Townsend for repairs. Captain George Vancouver named the bay to the east Port Townsend, noting that it was a large safe harbor. It was another 50 years before settlers entered the traditional lands of the S'Klallam.

Explorers, missionaries, fur traders, and gold prospectors brought diseases like smallpox to the S'Klallam, decimating the native population. By 1853, the Washington Territory government could document only 400 S'Klallam. By the 1850s, some four thousand settlers lived in the Puget Sound area. Conflict between the S'Klallam and the whites became more and more frequent.

The territorial Governor and Superintendent of Indian Affairs, Isaac Stevens, set obtaining as a top priority. In 1855, he met with several tribes to negotiate a treaty that ceded over 438 thousand acres to the Territory. While the S'Klallam kept the right to fish on their traditional lands, they were moved to the Skokomish Reservation some 93 kilometers (58 miles) to the southwest. It would be the 1970s before the US Courts affirmed the S'Klallam's treaty rights.

The S'Klallam community was well established on Port Townsend Bay by 1859. Incoming white settlers were welcomed by Chief T'chiis-a-ma-hum of the S'Klallam. Not being able to pronounce S'Klallam names, the settlers gave them names of royalty from Europe, calling the chief the Duke of York and his wives Queen Victoria and Jenny Lind. In 1904, Port Townsend dedicated the city's Chetzemoka Park to the chief, and a ferry between the Port of Port Townsend and Keystone was named after him in 2009.

Under the Indian Reorganization Act of 1934, the US government bought land near Point Julia at Port Gamble about 30 kilometers (19 miles) south-southeast of the Port of Port Townsend. The Secretary of the Interior set aside those lands as a reservation for the S'Klallam. Today, the S'Klallam reservation covers about 1340 acres. The people pursue their traditional fishing and hunting, and they practice traditional customs and rituals.

The first white settlers in the Port of Port Townsend area were Alfred Plummer and Charles Bachelder who built a log cabin on the site. In 1851, Port Townsend became the second city to be established on Puget Sound six months before Seattle. A farming and logging town, Port Townsend's first commercial enterprise was its seaport.

The Port of Port Townsend was made headquarters to the Puget Sound Customs District, and it soon became a busy international seaport with a reputation that rivaled that of the Barbary Coast of San Francisco. For years, many ships entered Port Townsend to pick up crews, even though there were not enough men there who wanted to go to sea. The practice of kidnapping sailors, or shanghaiing, became a part of life in the Port of Port Townsend. The maritime economy brought gambling halls, saloons, and brothels to Port Townsend.

To protect their families from the seedy downtown near the Port of Port Townsend, more affluent residents developed a commercial uptown district. Town leaders reached an agreement with the Union Pacific Railroad's Oregon Improvement Company to bring its line to Port Townsend from the Columbia River. Anticipating a bright future, Port Townsend's population doubled, and Port Townsend gained the nickname as the "City of Dreams." Unfortunately, in 1890, the railroad decided to end the line in Seattle, and the Port of Port Townsend's economy suffered dramatically.

In the late 1800s, the Port of Port Townsend was an active seaport, and the city was full of hope for the future. Many buildings and homes with ornate Victorian architecture were built. Shipping was critical to the local Port of Port Townsend economy. When the railroad failed to come to Port Townsend, local population declined rapidly. By the turn of the Century, the boom was over. The development of Fort Worden's artillery fortifications contributed to maintaining the local economy.

In the 1920s, a paper mill was constructed on the edge of town, bringing new life to the Port Townsend economy. A local election created the Port of Port Townsend in 1924, the port district covering all of Jefferson County. In 1927, a pulp and paper mill was built in Port Townsend, boosting the suffering local economy and strengthening the city to withstand the Great Depression. In 1927, the Chamber of Commerce pressed the Port Commission to build a boat harbor. An engineer was hire to identify the best site for a new harbor, and a proposal for dredging was submitted in 1931. The first pile was drive that year, and the Port of Port Townsend was a quickly mainstay for the struggling economy.

In 1941, the US Navy commissioned the Naval Magazine Indian Island to store munitions and assemble mines and submarine nets. Located on the south shores of Port Townsend Bay, the depot continues to be the main munitions handling dock on the United States' Pacific Coast. Combat ships and Sealift Command vessels ship munitions around the world from this Port Townsend facility. The depot is also used by the US Navy to refit Ohio class missile submarines.

Port Townsend's slow economy continued throughout much of the 20th Century. Many of the Victorian buildings that had stood since the late 1800s were torn or built over. But in the 1970s, Port Townsend underwent a rebirth when new people, including a lot of retirees, moved to town. Those homes and buildings remained from the boom years were recognized for their historic value. In 1976, The Port Townsend Historic District was listed on the National Register of Historic Places. In 1977, the Port Townsend Historic District was further recognized as a National Historic Landmark.

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