Muddy Hole (pop. 1961, 69) is a resettled fishing community located west of the northern entrance to Hermitage Bay between Richard's Harbour and McCallum. The settlement was first recorded in the 1836 Census with 20 people.

Settlers were no doubt attracted to Muddy Hole because the harbour afforded excellent protection for small boats and because of its proximity to excellent year-round fishing grounds. Cod, salmon, herring, and, later, lobster were the main species fished. Family names at Muddy Hole in 1869 (pop. 32) were Fudge, McDonald and Simms. By 1901 there were 88 residents. The population peaked at 123 in 1951. The exclusively Church of England population had constructed a school by 1901 and the Mary Magdalene school and church continued to operate there through the 1930s and 1940s.

Increasingly aware of the extreme isolation and consequent lack of facilities, people began to leave the community in the late 1950s. Financial assistance from government and advice from the local clergymen soon convinced all residents to relocate. The last people left in the summer of 1965, most going to such nearby communities as Harbour Breton, Gaultois and Ramea. Family names there at the time were Fudge, Morris, Simms and Wells. In the late 1980s several dilapidated buildings still stood.