The Sugpiaqs traveled between Katmai and the Naknek River, pursuing seasonal food sources. South Naknek was settled permanently after the turn of the century as a result of salmon cannery development. This is one of the many villages along the coast where Laplanders were brought in to herd reindeer. The herds were purchased in the 1930s by the BIA for the local Native economy, and were a welcome addition to villagers' diets. A federally recognized tribe is located in the community.
Residents rely on commercial fishing, fish processing and subsistence activities.
Salmon, trout, caribou, rabbit, porcupine and seal are utilized. During the April 1990 U.S. Census, there were 90 total housing units, and 51 of these were vacant. 37 jobs were estimated to be in the community. A project was recently completed to connect unserved homes to the piped systems. A landfill is available.