Before the Taiya River Valley become an active route for the gold stampeders, the Tlingit used the route to trade with the Athabascans in the Interior. After contact, the Tlingit acted as middlemen for a thriving trade in local and Euroamerican goods between the interior and Russian, Boston and Hudson's Bay trading companies. The Tlingit used the Chilkoot Trail as their main trading route in the interior and defended their monopoly, not permitting others to use the passes and even burning Fort Selkirk in the Yukon in 1852 when the Hudson's Bay Company attempted to trade directly with the Interior groups.

In 1879, US Navy Commander L.A. Beardsley reached an agreement with the Tlingit whereby miners would be permitted to reach the Yukon via the passes but would not interfere with their regular trade. Tlingit guides accompanied the first party over in May 1880, and transported the miners' gear for a fee. This trip set the foundation for the Tlingit packing business, which thrived until the Gold Rush.

Located at the head of the Chilkoot trail, Dyea erupted from a small trading post to a major port in 1897 after word of the Klondike gold discovery reached Seattle and San Francisco. Unfortunately, its prosperity proved to be short-lived. The town's poor harbor, the disastrous snowslide of April 3, 1898, and the construction of the White Pass and Yukon Route Railroad out of Skagway all served to doom the town. Fewer than 500 people remained after the summer of 1898, and the 1903 population had fallen to about a half dozen including E.A.Klatt, who farmed the once busy streets, growing vegetables for the Skagway market. Since the rush, nature has proven unkind to Dyea. The Taiya River has shifted several times, washing old buildings into the sea, and the rainforest climate of southeast Alaska has caused many buildings to collapse and rot.