Sally's Cove is believed to be named after Sally Short who, along with her children, were wrecked here while leaving her husband and took shelter in the cove.
One of the first settlers was Richard Gilley. Most settlers came from Woody Point and probably fished in the area for years before settling there. The first census taken was in 1884, with a population of 9. By 1891, it was 30 and by 1901 is was 59. In 1954, a road was built to the community.
When Gros Morne National Park was established, Sally's Cove was designated as a park community and was to be settled. By 1976, the population had declined to 188 and by 1981 to 100. Some residents refused to move, even though there was official encouragement and restrictions on building, selling and inheriting homes.
By the late 1980s, these were removed and Sally's Cove became a park enclave community.
Sally's Cove is perhaps best known for an incident strong to the 1971 provincial election. In the October 27 election, 106 ballots were inadvertently burned by the Sally's Cove returning officer. The election ended in a virtual tie and only one vote separated the candidates in the St. Barbe district.