Unadsdalur has been inhabited from the earliest days. According tomLandnáma, the Book of Settlements, it was the residence of Ólafur jafnakolls, who claimed all the land on the north side of Ísafjardardjúp bay from Langadalsá river to Sandeyrará river. There has been a church at Unadsdalur from 1867, when it was moved there from Snćfjöll. In those days it stood on the upper part of the yard; in 1897 the church was built which still stands today where the Dalsá river meets the bay. In 1703 21 people were registered as living at Unadsdalur.
At that time Vatnsfjardarstadur owned half of the land. Half of it, the farmer's half, had been deserted from the time of the epidemic. In 1801 twenty people lived at four farms in Unadsdalur. Kolbeinn Jakobsson, famed for his success at fishing, lived at Unadsdalur for decades at the end of the 19th century and beginning of the 20th. He last lived at Hólhúsid at Bćir.
Helgi Gudmundsson and Gudrún Ólafsdóttir lived at Unadsdalur after they bought the land in 1922. Helgi built a wooden house there shortly afterwards. Part of this house is still standing, as of 2006, and forms the corner of a large barn built around 1960 when Kjartan Helgason and Stefanía Ingólfsdóttir built a new stone house. They stopped farming in 1994 and moved to Mosfellsbćr. At Unadsdalur Helgi Gudmundsson built a boat around or just before 1930. It was built in the yard, sheltered by the side of the house. A so-called Sleipnir engine, using petrol, was installed on the boat. It was called Uni, and was outfitted from Dalsjór for many years. Helgi often needed to give rides to midwife Salbjörg Jóhannsdóttir of Lyngholt to various places on the coast, and was always ready for these trips, which sometimes took place in rough weather.
The old lower farm at Unadsdalur stood under the ridge of the slope in from the current house. There you could see the remains of the walls in the 1930s; the timber had disappeared from the roof. A so-called "lögrétta", an old circular structure whose shape could be well seen, and had an inner wall on a small part, stood about 30 metres upp from the outer edge of the cemetary. Its diameter was about 12-15 meters. Engilbert Ingvarsson remembers games in the "lögrétta", the area was smoothed out; the rest of the yard was quite bumpy. Sigurbjörg Helgadóttir from Unadsdalur says that her father had prepared a special tool to move gravel, and that the gravel ring of the lögrétta had been covered with turf, and can still be found.
At the old farm at Unadsdalur Ingvar Ásgeirsson and Salbjörg Jóhannsdóttir lived up until the beginning of 1936, as well as Gudmunur Jónsson and Gudný Gudmundsdóttir. Gudmundur was the father of Helgi at Dalur. Gudný was the daughter of Gudmundur Pálmason from Bćir. According to Engilbert Ingvarsson the couple spoke an old West Fjords dialect, using the d sound for hard and soft th sounds. The farm stood near the edge of the slope, a bit of a way from the lower from. and its shape can still be made out. It was a fairly well made turf farm, with a double-peaked roof and an entrance into the front part on the side. One could walk directly into the stables; they all had fallen down before 1930.
At Unadsdalur lots of turf was cut, right up into the middle of the 20th century. In Jardabók, The Book of Farms, it was said that there was enough turf there for fuel. On the shore beneath Unadsdalur during the 1920s and into the 30s was a small hut which Helgi Gudmundsson gave to the youth group Framför, where plays were shown, and people would dance and sing. Ingvar Ásgeirsson furnished the hut, which burned down in the 30s. The assembly house Ásgardur was built after that, where for years people would come from quite a distance for dances, for instance, on foot from the Jökulfirdir fjörds.
In 1965 the Mýrará river between Unadsdalur and Tyrdilmýri was dammed by the Snćfjöll Electricity Authority, making it probably Iceland's smallest power plant. At that point one could say that modernization had truly made its way into the area.