Prior to 1902, Kootenay Bay was only a flag stop for the paddlewheelers, which nosed right up onto the pebble beach there. In 1908 there was a pack trail to Crawford Bay and Gray Creek, which was upgraded to a wagon trail in 1912, but the steep terrain kept Kootenay Bay quite isolated.
The Fraser family, who emigrated here in 1912, ended up owning a lot of the land in the area, and in the 1920’s started the first commercial and agricultural development at Kootenay Bay. During the 1920’s and 30’s there were about 25 permanent residents, most of whom were ranchers and fruit growers.
In 1947 the ferry terminal moved from Gray Creek to Kootenay Bay and by June of 1948 the highway, which was the Trans Canada Highway, was paved through to the ferry landing. Also in 1948 the K’niksu Lodge was built where Faeries Landing now stands. This lodge was one of the first destination resorts on Kootenay Lake and had a faithful clientele of fishermen, as well as a convention centre for local groups to meet. The lodge burned to the ground in 1962. Today, Kootenay Bay continues to offer hospitality to the traveling public, and is home to about 100 people.
Excellent hiking trails begin just a few kilometres away at Pilot Bay. A short drive north towards Riondel brings you to Yasodhara Ashram, a yoga centre and spiritual retreat established over 30 years ago.