Onota was originally a Native American fishing site. When Schoolcraft County was set off in 1848, Onota was designated as the first county seat. However, the first recorded settlement at that location dates from 1869, when Bay Furnace, a blast furnace used for smelting iron, was established there. A post office opened May 16, 1870 and was discontinued August 14, 1879, after a fire destroyed the village. The Onota post office was reestablished and transferred on May 18, 1881, to a mining site in Onota Township approximately to the west, before being discontinued on February 29, 1924.