The land was set aside for use by "status Indians" by the Government of Canada in 1947 and was called 'Lot 500' on the official register. In 1959, the government built the first ten permanent houses for Dene families. They were colorful homes and so people began referring to the community as 'Rainbow Valley'. In the 1970s there were 200 residents living in 20 houses.  The name was officially changed to N'Dilo in 1991, which means "end of the island" in the local Dene dialect.