It was formerly a prosperous coal mining city, but has declined greatly since the closing of the coal mines. The population hit a maximum of 46,000 in 1948.
Efforts to transform Utashinai from a gritty coal mining town to an alpinetourist destination have met with mixed success. The town has adopted a Swiss theme as part of its tourist oriented strategy, and many new buildings are Swisschalet style. A medium-sized ski hill, Kamoidake, attracts a decent crowd of locals and hosts frequent ski meets, while a hot spring resort called Tyrol, after the Austrian region, is known throughout Hokkaido for the quality of its water. However, despite these new projects, Utashinai continues to experience population decline and economic stagnation. The high school closed in 2007, with students now traveling to Sunagawa, Akabira or Takikawa for their secondary education.
1890 Sorachi Coal Mine opened, founding of Utashinai.
1897 Utashinai Village split away from Nae Village (now the city of Sunagawa)