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The city spreads westward toward abruptly rising hills and eastward down to the water’s edge. Once Hoodsport was a bustling logging town, but today its income comes largely from vacationists, transient trade, and small-scale fishing operations. Native to the waters adjacent to Hoodsport is a small species of shrimp; the firm texture and delicate flavor brought so great a demand that over-fishing resulted. Now only strict adherence to conservation measures can guarantee the survival of the shrimp in Hood Canal.

The Twana Native American name for this place was Slal-atl-atl-tul-hu. The present name was chosen by residents because of the town’s position on the shore of Hood Canal. The use of Hoods rather than Hood harks back to the years when this body of water was called Hoods Canal.