Peggy's Cove's economy revolved around the fishery. Following the Second World War, tourism began to overtake fishing in economic importance. The local and provincial government have strict land-use regulations in the area of Peggy's Cove to prevent property development, plus there are restrictions on who can live in the community to prevent inflation of property values for year-round residents. There are only 30 year round residents, with that number increasing to 35 in the summer season.
In 1998, Swissair Flight 111 crashed into St. Margaret's Bay eight kilometres south west of Peggy's Cove. All 229 people perished. The cove became a staging point for first responders involved in the search and rescue operations, crash recovery operations, and the investigation of the crash. Many of the first boats to sail to the crash site were privately owned fishing boats from Peggy's Cove and surrounding harbours. Today there is a Swissair 111 memorial just a few kilometres from Peggy's Cove.

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