On January 6, 1806, Captain William Clark and twelve men from the Lewis and Clark Expedition set out from their winter quarters at Fort Clatsop to search for a stranded whale. They reached the whale carcass not far from Tillamook Head. Clark named a stream Ecola Creek after “Ekoli,” the Chinook word for whale. On September 10, 1846, the US schooner USS Shark sank while attempting to cross the Columbia River. Part of the wreck washed ashore south of Tillamore Head. In 1894, after a winter storm, one of the schooner's guns was discovered on the beach. The cannon became private property and the location where it was found was called Cannon Beach. A replica of the cannon is now on display along Highway 101, and the original is at the Cannon Beach History Center and Museum. Founded by American settlers in the late 19th century, the settlement was first named Ecola after the stream that flows into the Pacific at Arch Cape. Since Ecola was often confused with the town of Eola in Oregon, the town was renamed Cannon Beach in 1922.
Cannon Beach is famous for its landmark Haystack Rock near Tolovana Park in the southwest of the town and for its artists' colony. Many tourists also come here for whale watching. North of the town is Ecola State Park, about 14 km south of Oswald West State Park.
The tsunami caused by the Good Friday earthquake on March 27, 1964 destroyed a bridge on Highway 101 near Cannon Beach. To revive tourism in the city, the first sandcastle competition in the continental United States was held on the beach in August 1965. Since then, the sand sculpture competition, Sandcastle Day, has been held annually in the summer. The organizer is the local Chamber of Commerce and Industry (Cannon Beach Chamber of Commerce).
The National Park Service lists four structures and sites for Cannon Beach on the National Register of Historic Places (NRHP) (as of January 4, 2019).