Construction of the Muskoka Airport began in 1933 as a "make work" project for depression era men. The Town of Gravenhurst had made several representations to the Department of Defence (DND) (then responsible for civil aviation) regarding the establishment of an airport in this area. Initially, the airport was built as an emergency field on the Trans-Canada Airway.

The Town asked that the field be named Ferguson Airport after the first aircraft owner in Muskoka, but the Federal government policy at the time was to name all airports after the nearest postal outlet. Thus, the airport was officially named Reay Airport, after the nearest Post Office located six and a half kilometers north of Gravenhurst. The Town then asked that the name be changed to Gravenhurst Airport, and after a compromise by both sides, the field was renamed Muskoka Airport in 1938.

The first recorded landing at Muskoka (then Reay) Airport was on September 11, 1935 by a Mr. and Mrs. Wallace of Cleveland, Ohio. At the time, the east-west runway was graded to full length, and the north-south runways were in good condition. The initial construction of the field was completed in June 1936. Upon completion of the project the foreman in charge, Mr. W. Price, was appointed as caretaker, and the Civil Aviation Division of the DND oversaw daily operations.

During the war years, the Royal Canadian Air Force operated the airport as an auxiliary base for CFB Borden, to conduct flight training. In 1943, the field was made available to the Royal Norwegian Air Force (RNAF) under the British Air Commonwealth Training Plan. The RNAF moved their training base to Muskoka "Little Norway" from the Toronto City Centre Airport (then Toronto Island Airport).

At the end of the war, the RNAF returned to Norway, and control of the airport was transferred to the Department of Transport (DOT). The original airport license was issued to the DOT on May 20, 1946. By this time the airport had three turf runways, two at 3,100 feet in length and one at 3,000 feet. Doherty Air Services Muskoka Ltd. was the sole airport tenant.

In 1951, the Royal Canadian Air Force (RCAF) established North Bay as a training facility for their new F-86 Sabres. Muskoka Airport was selected as an alternate emergency landing field by the DND, and construction of a new 6,000 foot paved runway began. The construction was completed in 1952, and runway lighting was added by 1954.

In the mid 1950's scheduled air service between Muskoka and Toronto was established by Trans Canada Airlines (now Air Canada). Although the scheduled service is no longer offered, thousands of charter flights arrive at Muskoka each year.

The Department of Transport (Transport Canada) continued to operate the airport until November of 1996, when control of the facility was transferred to the District Municipality of Muskoka.

Today, the Muskoka Airport is a busy facility with an average of 13,000 aircraft movements each year. The airport currently offers aircraft maintenance, servicing, aircraft rental, charter flights, as well as flight training and sightseeing flights.