Marathon was originally known as Peninsula or Peninsula Harbour. In 1883, it was created to house construction workers on the Canadian Pacific Railway line. At its peak Peninsula was said to have had a population of 12,000, but when railway construction was completed the community became a virtual ghost town.
In the 1930s, there was some logging activity and during the Second World War prisoner of war camps were built in the area. The war raised interest in the potential of the area's forests for development. In 1944, Marathon Corp built a pulp mill there (see Pulp and Paper Industry). The mill began production in 1945 and the community of Marathon was created as a company town. In 1959, Marathon Corp sold the pulp mill and all of its operations. From there the mill changed ownership a number of times, finally closing in 2009 due to bankruptcy.
In 1981, the Hemlo gold deposit was discovered. There are now two gold mines in the area with many miners living in Marathon as well as businesses supporting the mining industry. While it is no longer a single-industry town, it remains very closely tied to its resource base.
Marathon is also a centre for recreation and is located near Pukaskwa (national) and Neys (provincial) parks. There are also important archaeological sites nearby, including the intriguing "Pukaskwa Pits" and campsites at the mouth of the Pic River.