The islands by the early 1800's were originally a 9 km sand spit extending from the mainland. The stream from the Niagara River to the south across Lake Ontario causes a counter-clockwise east-to-west current which has, over time, delivered sediments at the south end of the harbor to form a sand spit.
Preceding European colonization, the Toronto area was home to varied native peoples, including the Anishinaabeg (known also as the Ojibwa and Mississaugas) who were the last to attend the area.
The sand bars were first examined in 1792 by the British Navy, but they were well known by native people, who treated them as a place of recreation and relaxation. The Anishinaabeg, who named the peninsula "Menecing" meaning "On the Island", brought their sick to heal in its healthful atmosphere. The main peninsula became known to European settlers as the “Island of Hiawatha”.
A number of storms worked to destroy the peninsula, requiring constant repair to small rifts until finally, in 1858, an island was established when a storm completely separated the peninsula from the mainland and the gap was not repaired.
Ward's Island, the east section of the old peninsula, was named after the Ward family who first established in about 1830. His son, William, built the landmark Ward's Hotel in 1882, south of the ferry docks at Channel Avenue.
The Hanlan family was among the first year-round occupants on Toronto Islands, settling at Gibraltar Point in 1862. In 1878, after the islands were reassigned and plan D-141 spit the land into lots, a hotel was built by John Hanlan at the north-west edge of the island. In the 1890s-1910, after the area became known as Hanlan's Point, an amusement park and a baseball stadium for 10,000 spectators were built.
High lake levels constantly damaged island properties and, on January 1, 1956, the City of Toronto transferred authority for the Toronto Islands to the Municipality of Metropolitan Toronto to be developed as a regional park.