In the summer of 1841, Levi Sewall, Neamiah Alexander and Jesse Craig came to Northern Maine looking for a promising place to build a home. Mr Sewall had made the acquaintance of Mr. Jonas Drury, who told him of a beautiful place he had seen while traveling from Patten to Houlton along the West Branch of the Mattawamkeag River. There he had found an island and fall which he believed had the possibility of furnishing a good source of water-power. The three men located the island and the fall and, after looking over the surrounding territory, decided there, indeed, was an excellent place to build a home. Mr Sewalls home was the first one to be built in Island Falls. Both Mr. Sewall and Mr. Craig took active parts in the development of Island Falls as important officials of the growing community. Starting in 1852, the population of Island Falls grew by leaps and bounds, and as it grew, the need for public facilities and services also grew. The first public schoolhouse was built in 1859. The log building served as a church and regular meeting house, as well as for class work. This school was replaced in 1875 by a larger frame building. The first high school was built in 1897. In 1901, it burned down and was replaced in 1902. This new building served the community until 1973, when a consolidated school in Dyer Brook took it's place, which now serves several surrounding towns.

Before any churches were built in Island Falls, religious meetings were held in various homes in the community. In 1859, the Congregational Church was organized, but the church was not constructed until 1894.

On February 12, 1860, the Island Falls School was presented with a library, which was a gift from the Hammond Street Church in Bangor. Shortly after that, some bookcases were donated by Mr. Albian Merriman and the library was organized.