Island City is a city in Union County, Oregon, United States. Its name originated from the city's location on an island between the Grande Ronde River and a nearby slough. Island City lies at the intersection of Oregon Route 82 and Oregon Route 237 on the northeastern outskirts of La Grandeand is known for its picturesque location.
The erection of a grist mill in 1872 by John Caviness and his partner - Mr. Sterling. began the commercial activity of the town. Another of the pioneer business men was Charles Goodnough, who set up a store and in 1884 organized the Island City Mercantile & Milling Company one of the largest business enterprises of Union County in the 19th century. Much of its business was drawn from La Grande. The milling interest was sold to the Pioneer Flour and Milling Company in 1896.
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