In 1834, the Hudson's Bay Company opened a fur trading post on the lake, which operated during the 19th century. The Forest Reserves Act of 1898 established the Temagami Forest Reserve on the shores and adjacent lands of the lake in 1901. It was created to reserve the forests for future logging by restricting settlement. In 1904 it was increased to . As a result of this reserve, the building of cottages and resorts was only permitted on the lake's islands. This restriction is still in force today. Lake Temagami is popular for cottage vacationing: the number of cottages on Lake Temagami are estimated between 630 and 746. In addition there are 9 youth camps, and 12 commercial lodges.