St. Paul's was incorporated as a town in 1968. St. Paul's is an "enclave" community within Gros Morne National Park. In the 1874 census the population for the community was 1. The only resident was a trapper named Elias Gifford.
In the 1880s a lobster factory was opened up by Payzant and Fraser, a Halifax firm. By 1888 it was the most successful factory on the coast. By 1884 there were 11 settlers and by 1901 52 residents. Most of the houses were built on the shores of St. Paul's Inlet, so by the 1920s the fishing premises had to be built at Broom Point.
Logging has been an important employer in the town. The lobster fishery has died out somewhat, but other species are now caught.
With the establishment of Gros Morne National Park, tourism and the service industry have also become important employers to the area.