Anacortes — Thumbnail History (historylink.org) The City of Anacortes is located in Skagit County on the northern end of Fidalgo Island in Puget Sound. It is the only incorporated community on Fidalgo, which is separated from the mainland by the Swinomish Channel. Highway bridges link Anacortes to the mainland and to Whidbey Island to the south. Samish and other Northern Straits Salish peoples have inhabited the land in and around Anacortes for thousands of years. Permanent non-Indian settlement began in the 1860s. Anacortes was incorporated in 1891 with an economy based on lumber, fishing and fish processing, and farming. These industries thrived for many years before facing decline in the mid-twentieth century. Several oil companies selected Anacortes for refineries in the 1950s. Refining, tourism, residential and retirement housing, and commercial retail have come to dominate the local economy.