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The first Iditarod Trail Sled Dog Race was run in 1973, but the Iditarod Trail and the concept of the race go back even farther.

Portions of the Iditarod Trail were used by the Native Alaskan Eskimo Inupiaq and Athabaskan peoples hundreds of years before the arrival of Russian fur traders in the 1800s, but the trail reached its peak between the late 1880s and the mid-1920s as miners arrived to dig coal and later gold, especially after the Alaska gold rushes at Nome in 1898, and at the "Inland Empire" along the Kuskokwim Mountains between Yukon and Kuskokwim rivers, in 1908. The primary communication and transportation link to the rest of the world during the summer was the steamship; but between October and June the northern ports like Nome became icebound, and dog sleds delivered mail, firewood, mining equipment, gold ore, food, furs, and other needed supplies between the trading posts and settlements across the Interior and along the western coast. Roadhouses where travelers could spend the night sprang up every 14 to 30 mi until the end of the 1920s, when the mail carriers were replaced by bush pilots flying small aircraft and the roadhouses vanished. Dog sledding persisted in the rural parts of Alaska, but was almost driven into extinction by the spread of snowmobiles in the 1960s.

During its heyday, mushing was also a popular sport during the winter, when mining towns shut down. The first major competition was the tremendously popular 1908 All-Alaska Sweepstakes (AAS), which was started by Allan "Scotty" Alexander Allan, and ran 408 mi from Nome to Candle and back. The event introduced the first Siberian huskies to Alaska in 1910, where they quickly became the favored racing dog, replacing the Alaskan malamute and mongrels bred from imported huskies and other large breeds, like setters and pointers. In 1914, the Norwegian immigrant Leonhard Seppala first appeared, and went on to win the race in 1915, 1916, and 1917, before the race was discontinued in 1918 during World War I. The most famous event in the history of Alaskan mushing is the 1925 serum run to Nome, also known as the "Great Race of Mercy." A diphtheria epidemic threatened Nome, especially the Alaska Native children who had no immunity to the "white man's disease", and the nearest quantity of antitoxin was found to be in Anchorage. Since the two available planes were both dismantled and had never been flown in the winter, Governor Scott Bone approved a safer route. The 20 lb cylinder of serum was sent by train 298 mi from the southern port of Seward to Nenana, where it was passed just before midnight on January 27 to the first of twenty mushers and more than 100 dogs who relayed the package 674 mi from Nenana to Nome. The dogs ran in relays, with no dog running over 100 mi.

The Norwegian Gunnar Kaasen and his lead dog Balto arrived on Front Street in Nome on February 2 at 5:30 a.m., just five and a half days later. The two became media celebrities, and a statue of Balto was erected in Central Park in New York City in 1925, where it has become one of the most popular tourist attractions. However, most mushers consider Leonhard Seppala and his lead dog Togo to be the true heroes of the run. Together they covered the most hazardous stretch of the route, and carried the serum 91 miles, the single farthest of any team.

In 1964 the Wasilla-Knik Centennial Committee was created to honor the 100th anniversary of Alaska's induction into the United States of America from Russia. Dorothy G. Page the chairmen of the committee had the original idea to race a portion of the Iditarod Trail. Joe Redington Sr. (named the "Father of the Iditarod" by one of the local newspapers), and his wife Vi were Page's first true support and, with volunteer support they cleared up a portion of the trail. The first race, known as the Iditarod Trail Deppala Memorial Race in honor of Leonhard Seppala, was held in 1967. The purse of USD $25,000 attracted a field of 58 racers, and the winner was Isaac Okleasik. The next race, in 1968, was canceled for lack of snow, and 1969's small $1,000 purse only drew in 12 mushers.

Redington along with two school teachers, Gleo Huyck and Tom Johnson was the impetus behind extending the race more than 1000 mi along the historic route to Nome. The three co-founders of the race started in October 1972 to plan the now famous race. A major fundraising campaign which raised a purse of $51,000 was also started at the same time. This race was the first true Iditarod Race and was held in 1973, and attracted a field of 34 mushers, 22 of whom completed the race. Dorothy Page had nothing to do with the 1973 race, stating that she "washes her hands of the event". The event was a success; even though the purse dropped in the 1974 race, the popularity caused the field of mushers to rise to 44, and corporate sponsorship in 1975 put the race on secure financial footing. Despite the loss of sponsors during a dog abuse scandal in 1976, the Iditarod caused a resurgence of recreational mushing in the 1970s, and has continued to grow until it is now the largest sporting event in the state. The race was originally patterned after the All Alaska Sweepstakes races held early in the 20th century.

The main route of the Iditarod trail extends 938 mi from Seward in the south to Nome in the northwest, and was first surveyed by Walter Goodwin in 1908, and then cleared and marked by the Alaska Road Commission in 1910 and 1911. The entire network of branching paths covers a total of 2450 mi. Except for the start in Anchorage, the modern race follows parts of the historic trail.