It is situated on the southern half of the spit called Nook (or "Nooke") in Inupiaq, which separates Port Clarence (see also Port Clarence, Alaska) and Grantley Harbor, at the outlet of the Imuruk Basin.
The Inupiat had a fishing camp called Nook south of Teller in the early 19th century. The 1825-28 Beechey expedition found three camps with a total of some 400 inhabitants and a winter camp site with burial grounds in a roughly radius around the later site of Teller on September 1, 1827.
An expedition from the Western Union telegraph spent the winter at the present site of Teller in 1866 and 1867; they called it "Libbyville" or "Libby Station". When the United States Government introduced reindeer herding in Alaska, the Teller Reindeer Station operated from 1892 to 1900 at a nearby site. The station was named for United States Senator and Secretary of the Interior Henry Moore Teller in 1892 by Sheldon Jackson.
Teller was established in 1900 after the Bluestone Placer Mine discovery to the south. It took its name from the reindeer herding station. During the boom years in the early 20th century, Teller had a population of about 5,000 and was a major regional trading center. Natives from Diomede, Wales, Mary's Igloo, and King Island came to trade there.
The Norwegian Evangelical Lutheran Church built Teller Mission across the harbor from Teller in 1900. The mission was renamed Brevig Mission in 1903, after the Reverend T.L. Brevig, who also served briefly as Teller's first postmaster, a post to which he was appointed 2 April 1900.
The dirigible Norge detoured to Teller on its first flight over the North Pole from Norway to Nome in 1926. Many present residents of Teller came from Mary's Igloo. Mary's Igloo is now a summer fishing camp and has no permanent residents.
Today, Teller is an Inupiat village that depends on subsistence hunting and fishing.