In the nineteenth century the various settlements on the Twillingate Islands qv were all recorded under the heading of Twillingate. Purcell's Harbour was not recorded separately until 1911, with a population of 77. Local tradition has it that previous to this date there had been nearly twice that many people in the community. In the 1880s it enjoyed some prosperity, based on participation in the Labrador fishery. Though fairly small, Purcell's Harbour was winter anchorage for 15 to 20 schooners, owned by local planters and by crews from the neighbouring villages of Little Harbour and Kettle Cove qqv. Catches were sold to a local merchant, John Anstey, agent for the Duder firm at Twillingate. The first school was built, between Purcell's Harbour and Little Harbour, in 1875, while a Methodist church was built at Little Harbour in 1883 with the assistance of Purcell's Harbour residents. In the 1890s James Colbourne operated a sawmill in the community and several schooners were built by Purcell's Harbour crews at Loon Bay and Green Bay.
But the Bank Crash qv of 1894 had a bad effect on the Labrador fishery, with the collapse of Duder's having particular repercussions for Purcell's Harbour. Some residents continued in the Labrador fishery, supplied by Ashbourne's, who purchased Duder's Twillingate premises. Others turned to the inshore cod fishery and lobster catching to take up the slack. But a substantial number left the community for good in the early 1900s for lumbering jobs in central Newfoundland, particularly after construction began on the Grand Falls paper mill in 1905. By 1935 the community had only 60 residents and the complete collapse of the Labrador fishery soon after dealt the community another blow. A number continued to work in the woods while returning to Purcell's Harbour periodically, but in 1961 the population reached a low of 36 people.
Since that time, however, the population has increased, with the rise of the nearshore longliner fishery once again making the harbour's advantages a factor. Of equal importance has been the improvement of roads in the area, which facilitated access to schools and employment at Twillingate. The completion of a causeway across Main Tickle in 1974 assured Purcell's Harbour of continued existence, if only as a dormitory suburb of Twillingate. Since that time students have been bused to school in Twillingate, where most other services for Purcell's Harbour are located.