Port Orford claims to be the oldest town site on the Oregon coast, dating to 1851. The Qua-toh-mah band of Athabascan-speaking Tututni people were the original inhabitants of the area. In 1851, Captain William Tichenor, believing the site could become a thriving seaport, brought a small party of would-be settlers and then sailed for supplies. Local Indians, objecting to the presence of settlers on their land, drove them off. Tichenor returned later with a larger party and established the settlement. 

Port Orford, sixty miles north of the California state line, was the first county seat of Curry County when it separated from Coos County in 1855. After statehood in 1859, the seat was moved to Ellensburg (later named Gold Beach).

A forest fire destroyed Port Orford in 1868, and the town was gradually rebuilt. Early industries included gold mining, commercial fishing, lumbering, and shipping. Lumber was shipped by sea, and freighters and lumber schooners did a big business as logs were brought to local mills by horse-drawn wagons and trucks. William Winsor gave the name Port-Orford-cedar to a local tree, which was valuable for building ships and homes. Dairying and other farming also began in the surrounding area.

Gilbert Gable, an energetic and determined promoter, arrived in Port Orford from New York in the 1930s. He started mining operations and sawmills and unsuccessfully promoted a railroad connection to the interior. He spearheaded Port Orford's incorporation as a city—the first in Curry County—in 1935 and served as its first mayor. Logging and milling brought a boom to the area, which lasted from the 1940s to the 1970s.

Port Orford's high dock, home to a commercial fishing fleet, is one of only a few docks in the world where fishing and pleasure boats are lowered by crane into the open ocean and hoisted back up to trailers on the dock when they return to port.

Today, tourism and an active arts community are important to the city of 1,146. Port Orford has three "crown jewel" historic properties that attract thousands of tourists from April through October: Port Orford Heads Lifeboat Station (1934-1970), Cape Blanco Lighthouse (1870), and the Hughes House (1898) north of town.