Matagami was founded in 1963 with the development of mining in the area. Previously, it existed only as a very small prospecting camp accessible only by float plane, but after a viable mineral deposit was found in the late 1950s a permanent settlement began to be established. In 1962, the Quebec Toponomy Commission attempted to name the new community Mazenod after Charles-Joseph-Eugène de Mazenod, the founder of the Missionary Oblates of Mary Immaculate, but after a public outcry by local residents the community was named after Matagami Lake.