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Oak Island occupies a barrier island and adjoining mainland area near the mouth of the Cape Fear River in southeastern Brunswick County. Long before permanent European settlement, Indigenous peoples used the lower Cape Fear region's estuaries, rivers, maritime forests, and coastal waters for fishing, hunting, transportation, and trade. European colonization brought plantations, maritime commerce, and settlements to the mainland, but much of the barrier island remained sparsely populated for generations. The island's strategic position near the entrance to the Cape Fear River eventually made it important to navigation and coastal defense as Wilmington developed into one of North Carolina's principal ports.

One of the area's most important historical landmarks is Fort Caswell at the eastern end of the island. Construction of the fort began in the 1820s as part of a national effort to strengthen coastal defenses following the War of 1812. Its position near the Cape Fear River entrance allowed military forces to protect access to Wilmington and the surrounding region. The fort served different military purposes over the following century, including during the Civil War and later conflicts. Lighthouse facilities also became important to maritime navigation around the dangerous shoals and waterways near the Cape Fear coast, reinforcing the island's longstanding connection to shipping and seafaring.

For much of its history, the island's economy was tied more closely to fishing, navigation, and natural resources than to large-scale permanent settlement. That began to change during the twentieth century as automobile travel, bridge construction, and improved coastal roads made North Carolina's barrier islands increasingly accessible. Vacation cottages and residential communities expanded as families discovered the island's beaches and recreational opportunities. Tourism, construction, property development, fishing, and hospitality gradually became major parts of the local economy.

Modern transportation infrastructure fundamentally changed life on Oak Island. Bridges connected the island with the mainland, eliminating dependence on more limited forms of access and making year-round residency increasingly practical. Road connections through Southport and the broader Brunswick County highway network provided links to Wilmington and other coastal communities. As infrastructure improved, development spread along the island, with neighborhoods ranging from traditional beach cottages to canal-front homes, elevated residences, condominiums, and newer construction designed for coastal conditions.

The modern Town of Oak Island was created in 1999 through the consolidation of the former towns of Long Beach and Yaupon Beach. The merger brought much of the island's developed area under a single municipal government while preserving distinct neighborhood identities that had developed over previous decades. The community became known for its long beachfront, fishing pier, boating access, parks, recreational programs, and comparatively residential atmosphere. The Oak Island Lighthouse, completed in the 1950s near Caswell Beach, remains one of the area's most recognizable landmarks and reflects the continuing importance of maritime navigation to the region.

Today, Oak Island is both a permanent residential community and a major vacation destination within Brunswick County. Homeowners are drawn to its beaches, fishing, boating, coastal scenery, and proximity to historic Southport. Properties range from older cottages and established neighborhoods to waterfront residences and modern elevated coastal construction. While tourism contributes substantially to the local economy, Oak Island retains a year-round community character that distinguishes it from purely seasonal resorts. Its combination of maritime history, natural beauty, recreational amenities, and diverse residential opportunities continues to make it one of the most recognizable communities along North Carolina's southern coast.