Morehouse was formed from part of the Town of Lake Pleasant in 1835. Part of the town was later taken and added to the Town of Long Lake. An additional part of Morehouse was taken for Long Lake in 1861. In 1901, the Town of Inlet was formed from the northern end of the town.
The town is notable for many failed attempts to develop it economically. Ultimately, those parts of the original town only became important after separation from Morehouse.
One of the most newsworthy events to occur in town was the crash landing of an American Airways Curtis Condor in December 1934 and daring rescue of the crew by locals on snowshoes in the southern end of town.