Shaktoolik is located on the east shore of Norton Sound. It lies 125 miles east of Nome and 33 miles north of Unalakleet.

Shaktoolik was the first and southernmost Malemiut settlement on Norton Sound, occupied as early as 1839. Twelve miles northeast, on Cape Denbigh, is "Iyatayet," a site that is 6,000 to 8,000 years old. Reindeer herds were managed in the Shaktoolik area around 1905. The village was originally located six miles up the Shaktoolik River and moved to the mouth of the river in 1933. This site was prone to severe storms and winds, however, and the village relocated to its present, more sheltered location in 1967. The city was incorporated in 1969.

It is a Malemiut Eskimo village with a fishing and subsistence lifestyle. The sale and importation of alcohol is banned in the village.