Port Charlotte was named after Lord Frederick Campbell's wife, and it was set up mainly to provide housing facilities for the Lochindaal Distillery work force. Parts of the former distillery buildings are now in use as Youth Hostel and Wildlife Centre. Others are currently used by a garage nearby. The remaining warehouses are currently owned and used by Bruichladdich distillery to mature their Port Charlotte heavily peated spirit, named in tribute to the village and original distillery. No plans have been formally announced to reopen Port Charlotte Distillery to date.
In October 1813, the American privateer The True Blooded Yankee captured six merchant ships lying at Port Charlotte, casting them adrift and setting fire to three.