Summerside was originally named 'Green Shores Bedeque' after it's first settler, Daniel Green. Green was a Quaker Loyalist from Pennsylvania. Green had a son named Joseph, and Joseph's hole-in-the-wall inn was to inspire a new name for the community. As the story is told, Colonel Henry Compton once travelled to Green Shores on a bitterly cold day. As he approached his destination, he found himself sheltered from the frigid wind, and as the sun emerged from the clouds he said: "it's like the summer side of the island here". Green was so captivated with Compton's remark that he placed the name on a sign over the front door of his inn. Eventually the postmaster, Patrick Power, suggested to local authorities that 'Summerside' replace 'Green Shores'. It was found to be appealing and not duplicated elsewhere, and so has remained.

Summerside was first settled in 1840 when a wharf was constructed and a road was built to St. Eleanors, which was then the shire town of Prince County. Joseph Pope soon built a shipyard at the wharf, and the town began to grow. Summerside became a seaport from which goods, such as potatoes, were shipped to mainland New Brunswick and Nova Scotia. On April 1, 1877, Summerside was officially incorporated, but didn't gain city status until 1995.