Records show that Inagua was permanently settled between 1844 and 1849 with the establishment of Matthew Town, its chief settlement at the time, on the west.
It made quite a name for itself during its early days and by 1882 it was known as a place where one could find new opportunities and earn money. It became The Bahamas' hub for stevedore and contract laborers and attracted men from all around the country. Residents also enjoyed regular trade with the other islands of the Caribbean. A.H. Meallet, a local Inaguan in Matthew Town, was one of the first to publish a newspaper outside of the capital in the early twentieth century (the Inagua Record), which survived for five years.
Inagua's population declined between 1911 and 1931, dropping from 1,343 to 667 (according to the 1931 Census). Because of the lack of work, some families left to seek a living in Nassau while others migrated to the southern United States. By 1932, Matthew Town was described as "forlorn and desolate." Today, it is now the only populated town on the island.