Credit for the establishment of Poulsbo goes to Jorgen Eliason, a Norwegian who rowed across the sound from Seattle in 1883 and was reminded of the mountains, fjords, and valleys of his homeland. His relatives quickly followed, scratching out a farm at the head of Dogfish Bay. Other Norwegians arrived, and for many years more than half the residents were from Norway; anyone speaking English was likely an outsider.

In 1886, Ivar Moe named the town Paulsbo—Norwegian for Paul’s Place—but the postmaster general couldn't read his handwriting and listed it instead as Poulsbo. Over the years, Poulsbo survived on logging, farming, and fishing. A fleet of Bering Sea schooners sailed north to Alaska each summer and back home in the fall with cargo holds filled with salted cod. The town’s insularity was broken by the arrival of World War II, as military personnel moved in to protect the vital naval base at Bremerton. (A long anti-submarine net was stretched across Port Orchard Bay.)

In the early 1960s, Poulsbo was a complacent community in need of an attraction, so it went to the University of Washington for ideas. A survey showed strong support for a "Little Norway" theme, and the concept quickly took hold, just in time for the 1962 World’s Fair in Seattle. Scandinavian architecture and festivals perpetuate the culture of "Little Norway’s" first immigrants; many of the downtown buildings have Scandinavian decor and sell some Scandinavian products. And, yes, there is a Sons of Norway Hall on Front Street in Poulsbo. Unfortunately, Poulsbo has developed something of a schizophrenic personality, its quaint old downtown contrasting with the strip of RV dealers, real estate offices, and fast-food places up the hill.