At the eastern end of Burrard Inlet, the Port Moody area was originally used by the Squamish and Musqueam First Nations as a temporary summer camp.

In later years, European explorers from Spain and Britain mapped the area in search of sea otter fur to trade with China. As more permanent settlements, such as Fort Langley, developed in the area, Port Moody became significant as an alternate supply route when the Fraser River was hazardous or blocked.

With the Cariboo Gold Rush in 1858, the Royal Engineers under the command of Colonel Richard Clement Moody were dispatched from England to survey the new crown colony of mainland British Columbia. The group of military officers, 150 enlisted sappers and their families arrived and set up their barracks in an area still known as Sapperton in New Westminster. After surveying townsites, mapping the area and constructing several major roads still used today such as North Road, the Royal Engineers were recalled in 1863. All of the officers returned to England, but most of the sappers and their families chose to remain, accepting 150-acre land grants as compensation.

Four sappers received land grants in the Port Moody area. Of these, only the Murray family eventually settled here. Subsequently, Port Moody became home to a small resort community named Aliceville at the end of North Road, several farms, and a number of loggers and mill workers around the Inlet.