In 1902, between 230 and 300 descendants of Welsh families, who had originally migrated to Patagonia, Argentina, in 1865 to establish a cultural enclave preserving the Welsh language and nonconformist traditions, began settling in what would become Bangor, Saskatchewan. These migrants, facing increasing pressures in Patagonia—including recurrent floods along the Chubut River that devastated farmland starting in 1899, mandatory military conscription for young men into the Argentine army, and the imposition of Spanish in schools—sought new opportunities under British rule in Canada. The move was facilitated by a committee of prominent Welsh figures, including David Lloyd George, who helped organize transportation and funding, while local settler Evan Jenkins, a former Patagonian Welshman already homesteading near Saltcoats, actively encouraged his compatriots and guided their arrival.

The settlers arrived in Saskatchewan via boat and rail, initially camping in tents near Saltcoats before dispersing to homesteads in the Melville area, where fertile prairies offered promise for wheat farming and livestock rearing similar to their Patagonian experiences. About 88 families secured homesteads, constructing basic dwellings from logs, sod, or adobe to endure the harsh Prairie winters, and focusing on self-sufficient agriculture amid the open rolling terrain dotted with sloughs for hay. To maintain their cultural identity, they prioritized communal ties, establishing a school district in the nearby Llewelyn area by late 1903, which served as an early hub for education in Welsh.

The community adopted the name Bangor in homage to Bangor in Gwynedd, Wales, reflecting their desire to evoke homeland roots; this choice overrode an initial railway proposal, underscoring the settlers' agency in shaping their new identity. By 1904, additional school districts like Glendwyr and St. David’s emerged, laying the groundwork for a cohesive Welsh enclave centered on farming homesteads and basic infrastructure. The settlement's Welsh heritage continued to be celebrated, including through a major centennial event in 2002 that drew over 300 descendants and resulted in a book of family histories.

The Post office opened on March 1, 1909. The first postmaster was Thomas Roberts, who held the position from 1909 until 1919. Bangor was formally incorporated as a village on June 8, 1911, pursuant to Saskatchewan's municipal legislation governing urban municipalities. This status provided the community with a structured local government framework to manage growth and services amid the province's rapid settlement period.

The arrival of the Grand Trunk Pacific Railway line in 1908 spurred significant early infrastructure development, including the construction of a grain elevator that supported agricultural exports and the emergence of a modest commercial core with general stores and service buildings. These improvements transformed Bangor from a nascent settlement into a functional rural hub, facilitating trade and connectivity for surrounding farms.

Population expansion marked the village's initial decade, with early homesteading incentives drawing families to the area and elevating resident numbers during the 1910s boom in prairie settlement. However, this progress was tempered by external pressures, as World War I disrupted labor and markets while the Great Depression prompted farm consolidations and economic stagnation in rural Saskatchewan communities like Bangor.