The Afognak River was important to the Russian-American Company as a place to catch salmon to feed its workers. The Russians built a zapor (dam) to stop the fish from swimming upstream, and Alutiiq men and women harvested and dried the catch.

By the 1830s, the large and prosperous village of Afognak had grown up on the west side of Afognak Bay, near the river's mouth. The village had two parts. The first was Aleut Town, where about 100 Alutiiq people (also called Aleuts) lived. The second was Rubenskoe (also known as Derevnia, or Russian Town) where retired Russian men had homes with their Native wives and children. People of combined Russian and Alutiiq heritage, like the residents of Russian Town, were called Creoles. Fishermen from Norway and Denmark brought Scandinavian customs to the community as well.

Henry Elliott, an American visitor to Russian Town in 1888, described it as "a very picturesque and substantial village" of more than 300 people. The town included a Russian Orthodox chapel, vegetable gardens, and a fleet of wooden rowboats used for fishing. In 1900, Creole children went to "American school" in the morning to learn English, math, and geography. In the afternoons, they went to the Russian Orthodox parish school to learn Russian, religious lessons, and singing.

About 200 people were at Afognak in 1964 when the Great Alaska Earthquake struck. The ground shook violently and sank more than four feet, and all of the water drained out of Afognak Bay. Then it swept back in a tidal wave that flooded the village, destroyed many of the buildings, and ruined the wells. With the help of the International Lions Club, the community built a new village called Port Lions.