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In the 1860s, Utsaladdy was a sizable city, manufacturing and shipping lumber; shipbuilders here produced many boats for Puget Sound shipping, including the J. B. Libby, a side-wheeler, and the Cascades, a large stern-wheeler.  Today Utsaladdy is a small seaside community of mostly residential homes.

The name is a distortion of an Native American word which means “place of the berries.” The Chinook Jargon word Ollalie first referred to salmon berries only, but later was applied to all species of edible berries. The word “Uts,” means place.