Manistique is a city in the Upper Peninsula of the U.S. state of Michigan. It is the county seat of Schoolcraft County and the only incorporated community in the county. The city lies on the north shore of Lake Michigan, at the southwest corner of Manistique Township, but is politically autonomous. Manistique was founded where the Manistique River flows into Lake Michigan, forming somewhat of a natural harbor, which has since been improved with breakwaters, dredging, and a lighthouse. The river also provides water for a paper mill, Manistique Papers, which forms a large portion of the local economy. The city's largest employer is Schoolcraft Memorial Hospital. The economy also depends heavily on tourism. The city is also the first setting of the musical The Christmas Schooner.