The history of Quemchi is linked to the timber industry, as it was this activity that drew so many foreigners to the region to settle. It was founded on 4 August 1881 and this industry was to economically sustain the town until the 70s.

The people who lived in the region were the Huilliches and Chonos, who relied on fishing for seafood for survival. Then the European settlers arrived, attracted by the strategic location of the town, it being protected from the strong winds. As the importance of the timber industry grew, Quemchi started to receive ships from all over the world.

Nowadays the main industries are fishing, farming, and salmon farming, a relatively new industry for the area.