A ruggedly scenic 18-mile canyon in Pendleton and Grant counties, the Smoke Hole was carved by the South Branch of the Potomac River between North Fork Mountain on the west and Cave Mountain on the east. Tradition holds that it received its name from a cave chamber where Indians and early settlers smoke-cured meat. Locally, Smoke Hole is often referred to in the plural, as the Smoke Holes.

The canyon's precipitous topography, underlain by complexly folded and faulted rock strata, features innumerable sandstone and limestone cliffs such as Eagle Rock, Castle Rock, Blue Rock, Bulls Head, and Ship Rock. The Nature Conservancy considers Smoke Hole and vicinity to be "one of the most biologically rich places in the East," especially valued for its rare plant communities. The Nature Conservancy included the Smoke Hole as part of the larger Smoke Hole-North Mountain Bioreserve during its "Last Great Places" campaign.

The "Big Cave" on Cave Mountain was a source of saltpeter for the production of gunpowder from the colonial period through the War of 1812. This cave, not to be confused with the commercially developed Smoke Hole Caverns on State Route 28/55 or with Smoke Hole Cave in the Smoke Hole itself, is now best known as Cave Mountain Cave. Confederates again mined there during the Civil War, until Unionist home guards destroyed the works. Smoke Hole people were overwhelmingly Unionist during the war and Republican thereafter.

Descriptions of the Smoke Hole before World War II generally emphasized its inaccessibility and the pioneer lifestyles of its inhabitants. The place also acquired renown for the production of moonshine whiskey. Many came to believe that Smoke Holers were so uncivilized and violent that it was dangerous for outsiders to enter the gorge, and that revenuers frequently disappeared there. During the 1920s, Franklin attorney H. M. Calhoun (1866—1933) became a champion of the Smoke Hole and its people.

In 1927, the boundaries of the Monongahela National Forest were extended to include the Smoke Hole. Not until 1930 was the first improved road built into the southern half of the gorge. The Civilian Conservation Corps constructed a popular recreation area in the mid-1930s. On the eve of World War II about 50 families resided in the canyon, but the war initiated out-migration and long-term population decline. In 1965, Smoke Hole became part of the Spruce Knob-Seneca Rocks National Recreation Area. The remote Smoke Hole Lodge operated in the gorge until its loss in the 1985 flood, and its replacement operated until 2001.