Seat of Mason County, spreads in neat squares over the flats bordering the bay. From here highways radiate to all parts of the peninsula. In 1853 David Shelton settled on a donation claim; then other settlers began to arrive, at first slowly and then more rapidly as the demand for logs and cut timber grew. In 1884 the town was platted and named for its first settler. For a number of years it grew and prospered as a sawmill town and center for logging operations, which ate their way steadily inland, consuming in less than a generation forests that it had taken thousands of years to produce.
Unlike many sawmill and logging towns, Shelton is finding industries to take up the slack left by the depletion of the supply of timber suitable for milling. Most important of these is the manufacture of wood pulp, for which smaller trees are suitable.