As of the census of 2000, there were 412 people, 179 households, and 119 families residing in the city. The population density was 277.7 people per square mile (107.5/km²). There were 234 housing units at an average density of 157.7/sq mi (61.0/km²). The racial makeup of the city was 96.60% White, 2.67% Native American, 0.49% Asian, 0.24% from other races. Hispanic or Latino of any race were 1.21% of the population.
There were 179 households out of which 27.9% had children under the age of 18 living with them, 40.8% were married couples living together, 16.8% had a female householder with no husband present, and 33.0% were non-families. 27.9% of all households were made up of individuals and 13.4% had someone living alone who was 65 years of age or older. The average household size was 2.30 and the average family size was 2.65.
In the city the population was spread out with 26.0% under the age of 18, 7.3% from 18 to 24, 28.2% from 25 to 44, 22.3% from 45 to 64, and 16.3% who were 65 years of age or older. The median age was 37 years. For every 100 females there were 86.4 males. For every 100 females age 18 and over, there were 93.0 males.
The median income for a household in the city was $26,719, and the median income for a family was $33,611. Males had a median income of $26,023 versus $19,063 for females. The per capita income for the city was $13,749. About 17.2% of families and 17.5% of the population were below the poverty line, including 27.8% of those under age 18 and 14.5% of those age 65 or over.
Akeley has been celebrating "Paul Bunyan Days" since 1955, and the town hosts a tall statue of a kneeling Paul Bunyan next to a giant cradle. Akeley is also home to the Paul Bunyan Historical Museum.