The history of Ust-Tsilma began in 1542, when a Novgorodian named Ivashka Dmitriev Lastka received a royal charter granting him ownership of lands along the Pechora River. This event marked the emergence of one of the oldest Russian settlements in the European North of modern Russia. The village's name directly points to its geographical location—it arose at a strategically important point, opposite the mouth (ustye) of the Tsilma River, which flows into the high-water Pechora.
The main factors in the settlement's development were its advantageous location and natural resources. The initial interest of the Moscow State in these distant lands was fueled by hopes of discovering rich deposits of copper and silver. Although large-scale ore mining did not reach industrial proportions in those days, Ust-Tsilma quickly turned into a convenient transport hub for the development of northern territories and the establishment of the fur trade.
The early economy of the settlement was built on traditional northern trades: fishing (Pechora salmon was especially valued), hunting beavers and fur-bearing animals, as well as livestock breeding. The cultural identity was formed under the strong influence of Novgorod traditions and the strict rules of the Old Believers, whose representatives sought solitude and freedom of religion in these parts. As early as 1547, the Church of St. Nicholas the Wonderworker was built here, becoming the spiritual center for the region's first inhabitants.