The town was launched with buildings moved from the town of Grant (down the spur line about 25 kilometres) which was abandoned, most of the buildings being moved to the new Nakina town site. The town is approximately 620 kilometres north of the city of Thunder Bay, Ontario. The origins of the town are initially support of the railway, but it's raison d'etre has evolved through lumber, pulp and paper, mining and tourism.
As an important railway service stop from the 1920s to the early 1970s, the town had a railway round-house as well as a watering and fueling capability. During World War II, there was also a radar listening post on the edge of the town that was intended to watch for a potential attack on the strategically important locks at Sioux Ste. Marie at the intersections of Lake Superior and Lake Huron. Research into the radar site in the Canadian National Archives indicates that it was largely a United States Army operation. It was totally removed shortly after the war.
In the 1970s pulp and paper operations near the town resulted in growth in the towns population to it's peak of approximately 1200. However, at this point cost controls in the railway industry meant that service and maintenance could be consolidated at points much more distant from one another than had been common in the first half of the 20th century. As a result, the value of Nakina as a railway service community was greatly diminished, to the point where it was no longer a substantial employer in the town.
As of 2004 the town remains focussed on tourism, diminished pulp and paper operations, and support of other more northern communities (food, fuel and transportation). Mining and minerals industries are often seen as a souce of further growth, though the Canadian Shield geology of the area makes extraction of minerals like gold an expensive and uneconomical operation.
Access to the remote northern community is via Via Rail, road (highway 584 from highway 11) and small aircraft service at the town's small airport.