The name is for the Native American people who once lived there, the Quil-ceed-a-bish. In 1841, the Wilkes Expedition charted the place as Kwil-sid. Other spellings that have been used are Kol-sids, Col-cene, Col-see-ed, and Cul-ah-seen. The tribal name means saltwater people.
The town centers along the river flats and straggles down to the water’s edge. The lowlands where the town now stands were settled in the late 1860s, when Samuel H. Cottle took up land there. Others soon joined him, putting up log cabins and starting small logging operations and farming. In the 1890s, the Port Townsend and Southern line was laid to Quilcene, and the hope that the town would become an important link led to a short-lived boom, which collapsed with the abandonment of plans for the rail line. By the 1940s, farming and dairying are the major sources of income for the community. Today, Quilcene is the district headquarters for the Forest Service.