Pakefield was historically a fishing community. It is a site well known for its agrology with important finds like flint tools found in Pakefield cliffs have shown that Hominins in between Homo Antecessor to development of Homo Heidelbergensis were active there 700,000 years ago. In the Domesday book Pakefield is called “Pagefella”, the name probably coming from Pagga's or Pacca's field.

Bloodmoor Hill was the site of settlement in the 2nd and 3rd centuries and the 7th and 8th centuries. The Saxon period consisted of a relatively dense settlement as well as a cemetery which included at least one rich barrow burial. Artefacts were discovered in the cemetery in the 18th Century and the site was the subject of archaeological investigations between 1998 and 2006. In the modern era, Pakefield played a very important role in the Kindertransport programme nine months before the start of World War 2. Many children who had not found prearranged foster families were given temporary shelter in the local holiday camp.

The former tram terminus of the Tram Service from Lowestoft is located in the centre of Pakefield and is now the site of the Tramway Hotel. Coastal erosion has been an issue in the area for a number of years, although this may have begun to stabilise. A former lighthouse still stands on the coastline and is used by Pakefield Coastwatch. Legend has it that Pakefield has a ghost — occasionally fisherman have seen a white figure walking along the cliff tops near Crazy Mary's Hole. Ghostly footsteps have also been claimed to have been heard along Florence Road at 9pm.