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In 1902 a prospector, John Karshner, discovered several hot springs in the area. He began a homestead and vegetable farm. In the same year, the United States Army built a telegraph station. The area became a service and supply point for miners in the Tofty and Eureka mining districts. It was known as Baker's Hot Springs, after nearby Baker Creek.

Farming and livestock operations in the area produced fresh meat, poultry, and produce for sale. In 1907, a miner named Frank Manley built the Hot Springs Resort Hotel. The resort was a four-story building with 45 guest rooms, steam heat, electric lights, hot baths, a bar, a restaurant, a billiard room, a bowling alley, a barber shop, and an Olympic-size indoor swimming pool which used heated water from the hot springs. During the summer, the hotel's private boat transported guests from steamers on the Tanana River. In the winter, an overland stagecoach trip from Fairbanks took two days. The town was renamed Hot Springs.

The resort and the mining in the area caused the town to prosper. It had a store, a newspaper, a bakery, clothing stores and other businesses. The population of the area in 1910 was more than 500. In 1913 the resort burned to the ground. Mining activity was also in decline and by 1920 only 29 residents lived in Hot Springs.

The town's name was changed to Manley Hot Springs in 1957. In 1959, completion of the Elliott Highway gave Manley Hot Springs road access from Fairbanks during the summer months and, in 1982, year-round, as the state began plowing the highway.

Manley currently has 72 residents (2000 Census).

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