Arlee was founded and its post office was established in 1885, serving as the trade center for the people of Jocko Valley and the Flathead Indian Reservation. 'Arlee' comes from the English spelling of the Indian word 'Alee', which means 'red night'.
The chief of the Flathead Indians, Charlo, had refused to conform with the treaty of 1855 at Grass Valley. Despite Charlo's decree, the Indians decided to choose another leader, Alee. So the small community was named after the Indian leader.
Arlee is located in northwestern Montana, it is situated north of Missoula in the Flathead Valley.