The name Sandwood Bay probably derives from the Viking name 'Sandvatn' ("sand water") and it is believed longboats were dragged across the sands into Sandwood Loch. There are also remains of Pictish settlement in the area. The area has been largely uninhabited since 1847 when the land was cleared for sheep farming as part of the Highland Clearances. A number of shepherds huts remained and were occasionally occupied until around 1940. On 30 September 1941, Sergeant Michael Kilburn from 124 Squadron at RAF Castletown was flying a Spitfire south west of Cape Wrath when the engine failed. He crash-landed the plane on the beach at Sandwood, and managed to escape uninjured. The wreck remained on the beach and over time the entire bodywork was eroded away by the sea but its engine, a Rolls Royce Merlin, remains largely intact and occasionally emerges into full view whenever tidal and weather conditions permit.