The first people to occupy the Upper Peninsula of Michigan were Algonquin speaking peoples.
Gladstone was first settled by European descendants in 1859 when the Hamilton Corporation of Fayette began using it as a shipping port for selling and transporting iron ore. The earliest development was located along Saunder's Point, a small peninsula extending into Little Bay De Noc. The peninsula was named for Captain Nate Saunders who headquartered there while fishing at various points along the bay.
Throughout the 1860s and early 1870s, Gladstone expanded to become a shipping point for lumber, coal, and copper, in addition to iron ore.
In 1876, the mine operated by the Hamilton Corporation was depleted, and the company moved their operations to a new mine further south. As a result, more ore began to be shipped out of Escanaba. Gladstone's role shifted to that of a rail hub, as Arthur Delano, the president of Soo Line Railroad, had commissioned a train depot built in Saunder's Point during the previous winter to start land shipping for the Hamilton Corporation.