The Saanich People have lived on the peninsula for thousands of years, and prior to European contact, had winter villages throughout the region. In 1852 the Hudson's Bay Company obtained large tracts of forested lands from the Saanich People. James Douglas purchased much of the land in North Saanich in 1858, and one year later William and Charles Reay purchased land from the Hudson's Bay Company and were the first settlers on the northern portion of the peninsula. Some of their land is now the town of Sidney. Also in 1859, Captain George Richards, RN, when in command of the surveying vessel 'H. M. S. Plumper', was given the task of establishing the exact location of the 49th parallel, and also to provide continuous survey work in the waters around Vancouver Island. During this time Captain Richards was responsible for establishing names for many of the islands, inlets, harbours, passages and channels. According to one account Sidney Island and Sidney Channel were named by Captain George Richards after the Captain's friend, Lieutenant Frederick William Sidney (later Captain), also a member of the Royal Navy who specialized in survey work in the Hydrographic Service of the Royal Navy. Another story as to the naming of Sidney comes from the findings of the British Admiralty who state "Prior to 1845 this island was named Sallas Island. During the years 1845 - 1851 a Captain Kellet carried out a large scale survey, and in the charts of that period Captain Kellet called the island Sidney. The Admiralty also states that there is very little doubt that at some time between the years of 1845-1851, Captain Kellet re-named the island. Again it is believed that the Island was re-named Sidney in recognition of Captain F. W. Sidney".

In 1891, the Township of Sidney, named after the island and channel, was incorporated by the Brethour family. Five hundred acres of land owned by four of the Brethour brothers, was registered as the Township of Sidney. By the close of 1892, there was a general store, a post office, a boat building shop and a hotel. The name "Sidney" apparently came about when Julius Brethour, who became the first president of the Victoria and Sidney Railway in 1893, was asked the question concerning a name for the site. "Brethour, looking across the water from the rude settlement, saw Sidney Island directly opposite, 'It will be called Sidney', said Mr. Brethour. "Sidney continued to grow as pioneer families moved into the area, and businesses flourished.

Transportation played a major role in the success of the peninsula, with rail and sea links to Victoria and the mainland, and more recently with Victoria International Airport established on the border of Sidney. Sidney was incorporated as a village on September 30th, 1952, and has enjoyed steady growth, and is now a town with a population in excess of 11,000 people.