The region that was to become Grand Isle offered refuge to Acadians fleeing British persecution in the 1750s, and was settled permanently in 1805. The town was incorporated on March 2, 1869 from Grand Isle Plantation, and its name was changed to Grand Isle in 1872.
The town contains a large and fertile island located within the town and in the middle of the St. John River just south of the village of Lille.
United States Route 1 and the Bangor and Aroostook Railroad both run along the Maine side of the St. John River, which forms the state's northern boundary with Canada.