There appears to be possibly two theories on how Sugarloaf Key got it's name. One would tell us simply that there was once a very large Indian mound near the eastern shore just north of what is now the Bow Channel bridge, that was shaped like an old fashioned loaf of sugar, hence the name. The second theory is that it was simply named after the Sugarloaf Pineapples which were once grown here commercially. On the north side of the highway, near the airstrip and behind the Sugarloaf Lodge marina and restaurant can be found the famous "Bat Tower" constructed by Richter C. Perky in 1929. The fifty foot wooden tower was built to house large colonies of bats which in turn would hopefully devour the clouds of mosquitoes. The bait was put out, but the bats never showed up, leaving the tower a conversational point of interest to this day.

Today, Sugarloaf Key, which is 17 miles from Key West, boasts a motel and restaurant, a marina with a bait and tackle shop, a convenience store/deli/gas station, a post office, a bank, an airstrip, a large marine dealer and repair business and an auto repair shop. There is an excellent kayak eco-tour departing from the marina plus canoe and kayak rentals available. The key also has a fire station, an elementary school and a church.