The original Port Townsend Brewing Company was one of the largest and longest operating breweries of its time. It was capitalized at $25,000 and established September 5, 1905 by George Watkins, Michael Hartman and N.W. O'Rear. Ernest Studerus, a well-known citizen at the time, served as brewmaster. The site of the old brewery was on the west side of Monroe Street between Water and Washington Street which now houses the Athletic Club.

June 9, 1906 the first beer was tapped. The local newspaper, The Leader, had these words to say: "Port Townsend beer drinkers will be given an opportunity today to test the product of the new Port Townsend company's product the brew that might make the city famous." Their prediction was correct and the company became very successful. Not only did they provide beer to every local saloon, but they also shipped to other areas around Puget Sound.

Unfortunately for the brewery, Washington voters passed the prohibition initiative in the fall of 1914. The law began in January of 1916. Port Townsend Brewing Company continued with a line of non-alcoholic beverages but closed a short time later.