Fort McMurray is located in northeast Alberta, in the middle of the Athabasca oil sands, surrounded by boreal forest. It has played a significant role in the development of the national petroleum industry.  Before the arrival of Europeans in the late 18th Century, the Cree were the dominant First Nations people in the Fort McMurray area. The Athabasca oil sands were known to the locals and the surface deposits were used to waterproof their canoes. In fur trade days the location of Fort McMurray was an important junction on the fur trade route from eastern Canada to the Athabasca country. In 1778, the first European explorer, Peter Pond, came to the region in search of furs, as the European demand for this commodity at the time was strong. Pond explored the region farther south along the Athabasca River and the Clearwater River, but chose to set up a trading post much farther north by the Athabasca River near Lake Athabasca. However, his post closed in 1788 in favour of Fort Chipewyan, now the oldest continuous settlement in Alberta.

On April 1, 1995, the City of Fort McMurray and Improvement District No. 143 were amalgamated to form the Municipality of Wood Buffalo. The new municipality was subsequently renamed the Regional Municipality (RM) of Wood Buffalo on August 14, 1996. As a result, Fort McMurray was no longer officially designated a city. Instead, it was designated an urban service area within a specialized municipality.