The village grew up along in a spot where the fast-flowing Juutua River empties into Lake Inari. As the centuries went by, the village developed into a robust and active market and trade centre. When the municipality of Inari was founded in 1876, the village became its centre.
The people living in Inari then were not, however, the first people to live in the village, as people had been living on the shores of Lake Inari for thousands of years before that. Several stone-age dwellings have been found in Vuopaja, on the edge of town near Siida, the Sámi Museum.