Craiglie lies about 6 kilometres south of Port Douglas in the far northern region of Queensland. It was established when workers hauling freight from inland mining operations stopped to rest in the area to let their horses graze and rest before continuing to their destination. The farming community in nearby Mowbray Valley would go to Craiglie for supplies and send children to school there.
When Four Mile Beach was developed in the 1980s, people found cheaper accommodations in Craiglie. As tourism developed in the area, so did Craiglie, and many businesses of wholesale, retail and services relocated in the suburb for its lower rental prices. The development of tourism also increased the population of Craiglie over time.