The first European settlers in the Tatamagouche area were the French Acadians, who settled the area in the early-1700s, and Tatamagouche became a transshipment point for goods bound for Fortress Louisbourg. In 1755 the British expelled the Acadians from Nova Scotia and the village was destroyed. All that remains from that period are Acadian dykes and some French place names.
Ten years later, on August 25, 1765, the land that became Tatamagouche was given to British military mapmaker Colonel Joseph Frederick Wallet DesBarres by the British Crown. DesBarres was awarded 20,000 acres of land in and around Tatamagouche on the condition that he settle it with 100 Protestants within 10 years. Low land prices in other colonies made attracting tenants difficult, but an offer of six years free rent to dissatisfied residents of Lunenburg was a success. Protestant repopulation also grew considerably before the end of the century with a flood of Scottish immigrants following the Highland Clearances.
In the nineteenth century, like many other villages in the area, Tatamagouche had a sizeable shipbuilding industry. Trees were plentiful and sawmills started appearing on area rivers, producing lumber for settlers. Builders needed the lumber to produce the ships and it was common to send a completed vessel overseas loaded with lumber.
The age of ship building in Tatamagouche was a prosperous time. Although the first ship was built in 1790 the shipbuilding industry was not really significant until the 1830s when Tatamagouche Bay would see four or more ships leave for the Northumberland Strait each year. The age of steam ended ship building in Tatamagouche.