The town of Ruby was established in 1911 as the result of a gold rush. Gold was first discovered at the current townsite in 1906 on Ruby Creek. That discovery brought more prospectors to the area. In 1910 word leaked out about a gold strike on Long Creek, 30 miles south of Ruby, and a stampede was on. Discoveries on other nearby creeks followed and Ruby became the supply point for the mines.
At its peak the population was near 3,000, but by 1918 the town was in decline. Many of the men had left to fight in World War I and several of the towns business people and their families were lost in the sinking of the Canadian passenger liner Sophia.
A fire in 1929 destroyed much of the business district and a flood in 1931 took out what was left of buildings on the riverfront.
After World War II the population of the community had left. Natives from the village of Kokrines moved in to take advantage of the abandoned homes. There are currently fewer than 200 people living in Ruby.