There have been Athabascan Indian settlements in the region of what is now Tok for many centuries.
The town at the present location of Tok began in 1942 as an Alaska Road Commission camp used for construction and maintenance of the Alaska Highway. So much money was spent in the camp's construction and maintenance that it earned the nickname "Million Dollar Camp" from those working on the highway. In 1947 the first school opened, and in 1958 a larger school was built to accommodate the many newcomers. In 1995 a new school was opened to provide for the larger community. A U.S. Customs Office was located in Tok between 1947 and 1971, when it was moved to the Canadian border.
In one version, the name Tok is derived from the Athabascan word for "peaceful crossing." The U.S. Geological Survey notes that the name "Tok River" was in use for the nearby river around 1901, and the Athabascan name of "Tokai" had been reported for the same river by Lt. Allen in 1887. In another version the name is derived from the English words "Tokyo camp", although the major war benefit was supporting the transfer of airplanes to the Soviet Union. Another version claims the name was derived from the canine mascot for one of the Engineer units that built the highways. The name has no connection to the western Alaskan community of Newtok.
In the 1940s and 1950s, another highway, the Tok Cut-Off was constructed and connected Tok with the Richardson Highway at Glennallen. It was a "cut-off" because it allowed motor travelers from the lower United States to travel to Valdez and Anchorage in south-central Alaska without going further north to Delta Junction and then traveling south on the Richardson Highway.
In July 1990 Tok faced extinction when a lightning-caused forest fire jumped two rivers and the Alaska Highway, putting both residents and buildings in peril. The town was evacuated and even the efforts of over a thousand firefighters could not stop the fire. At the last minute a "miracle wind" (so labeled by Tok's residents) came up, diverting the fire just short of the first building. The fire continued to burn the remainder of the summer, eventually burning more than .
On January 10, 2009, Tok made headlines with an unconfirmed temperature reading of .