The objective of this paper is to examine the evolution of settlement in northern Canada from the viewpoint of the paradigms of bottom‐up or top‐down development, the former being community driven and the latter government initiated. Following a review of the stages of settlement evolution and the major influences on them including the airplane and the Second World War, the Scone Report's characterization of settlements as developed or underdeveloped is presented. Much of the initial settlement of the North was top‐down involving government or private capital from outside the region because it was a frontier devoid of settlement. Subsequently the building blocks of bottom‐up development emerged. The federal government's devolution of power to the NWT Council in Yellowknife and the decentralization of a civil service from Ottawa was an important prerequisite for local government. This process has been strengthened recently by comprehensive settlements with aboriginal groups providing another building block in the form of land, hunting and mineral rights, and cash compensation for the extinguishment of aboriginal rights. A third building block for bottom‐up development lies in the mixed economy which has emerged encompassing employment and business income from, for example, regional development corporations and co‐operatives, transfers from Ottawa, country food, and the use of traditional skills of hunting, fishing and trapping. The adaptation of these skills to tourism, prospecting, guiding as well as aboriginal participation in oil and gas development and diamond mining indicate that such community involvement with a modern economy will outlast specific non‐renewable resource use.