The Ala Wai canal was built in 1928, transforming Waikiki from a salt marsh and carrying runoff from the city to the sea. In the early nineteen fifties, the channel was dredged through the reef giving Ala Wai direct access to the sea. Previously, access was through a channel to Kewalo Basin. Magic Island was built and the channel to Kewalo permanently closed in the mid nineteen fifties.

Today the Harbor has about eight hundred moorings and is host to Hawaii Yacht Club, Waikiki Yacht Club and TransPac Headquarters. At Magic Island Petroleum (aka-the fuel dock) you can get a cup of coffee and catch up on the latest news from around the harbor. The small convenience store has a breakfast/lunch counter and a laundermat.  The fuel dock also sells diesel and non-ethanol gasoline, propane and ice and is the home of the Poor Boyz Yacht Club.