The lands where the modern town is located historically belonged to the Wirangu Aboriginal people. The European history of this area began on February 3, 1802, when the British navigator Matthew Flinders charted the bay. The name Streaky Bay arose from the captain's observation of distinct streaks in the water caused by the play of light and seaweed.
The settlement itself was officially surveyed in 1872 and was originally named Flinders. However, the name of the bay remained so firmly established in local usage that it became the town's official name in 1940. The transformation of a small settlement into an important regional center was due to its favorable geographical position: before the development of rail and road networks, the bay served as a natural harbor and the only reliable route for logistics.
The early economy of Streaky Bay was built on three pillars: sheep farming, wheat cultivation, and fishing. The surrounding areas of the Eyre Peninsula proved suitable for pastoralism and agriculture, which necessitated the creation of a port to export produce. The first European settlers were primarily pastoralists who occupied the land around the bay in the mid-19th century.
The town's cultural life was shaped by its frontier conditions and isolation. Due to its significant distance from Adelaide, local residents were heavily dependent on the arrival of ships carrying news and goods. This fostered close social ties within the community and a unique way of life closely tied to the sea and seasonal agricultural cycles.