It was a trading center for Native Americans and the site of the signing of an important Native American treaty called the Point Elliott Treaty. Until 1862 when a post office was established, the place was called Point Elliott. The present name, suggested by J. D. Fowler, the first postmaster, is from the Native American name of the place, Muckl-te-oh, as revised to suit the postal service. Spellings on older maps include Muckilteo, Muckleteo and Muckiltoe.
The city sprawls along the Sound and a salt-water lagoon. Once an active sawmill town, today, since the gutting of the Crown Mill Company plant by fire, little more than the remnants of lumber yards remains as a reminder of the past. Ferries run to Whidbey Island, whose bluffs are visible to the west across Possession Sound.