Government Island has a significant past as base for the construction and maintenance of Great Lakes lighthouses from 1874 to 1939. Several buildings once housed a small community of workers that lived on the island, though any evidence of a settlement is long gone.

The island was formerly known as Island Number Six, and was reserved by the United States Government as a construction base for two lighthouses. It was used to house workers who built the Spectacle Reef Light Station near Bois Blanc Island in 1874. According to an account by John J. Sellman, whose father was a foreman for the United States Lighthouse Service, a bunkhouse, cookhouse, and cabins were built on the north side of the island facing Scammons Harbor. The foreman and his family had their own cottage they could use as a summer residence. The site was chosen for its deep-water access that could accommodate large vessels, including lighthouse tenders, scows, and tug boats. The timber crib that was the base of Martin Reef Light was built at Government Island and hauled to the reef.

During the construction of the Martin Reef Light in the East Entrance to the Les Cheneaux Islands, 18 people lived there at the site and worked on the light over two years in the late 1920s. Martin Reef Light was completed and commissioned in 1927.

The submerged pilings from the old United States Lighthouse Service dock, and clearings on the northwest end of the island are the only remaining evidence of occupation.

The island was turned over to the Hiawatha National Forest Service, which maintains it and supervises its use. Decades of heavy use and infrequent care prompted the Forest Service to recently replace two rustic outhouse structures on the island. The Forest Service contracts with volunteers to maintain the outhouses, pick up litter, and keep an eye on the island in the summer months. The Forest Service is responsible for pumping the outhouses, providing signage, and heavier maintenance.

Several local residents who visit the island with their families have made it an annual tradition to clean up trash and campsites for future enjoyment by other visitors. Anyone who wants to help with the maintenance of Government Island should call the Hiawatha National Forest Service Office in Moran Township at (906) 643-7900, extension 153.