McDougall Township, adjacent to Parry Sound, was intended for farming, settlers were lured to the area through the government's "Free Land Grant Policy" in the mid- to late- 1800's. Settlers soon found that the rock and scrub brush were not suitable for farming, and logging became their livelihood.
The Municipality of McDougall was incorporated on May 1, 1872. In 1907, the rail line was extended and a small train station was built seven miles north of Parry Sound. The station was named Peart, and later, Ambo.
In 1913 construction began on the Canadian Explosives Limited plant that was named Nobel, after the Swedish scientist who invented dynamite. The plant became a part of Canada's wartime history. A nearby location later became a testing site for the Avro Arrow's jet engines, a space age effort that put Canadians at the forefront of modern aeronautics. Modern-day Nobel remains a popular area for cottagers along Georgian Bay and the inland lakes.
January 1, 2000, by Ministers order the Township of McDougall amalgamated with the unorganized geographic township of Ferguson, and created the Municipality of McDougall.