Rice Lake had its beginning in 1864, when Knapp, Stout and Company, famed Menomonie logging firm, constructed a storage dam on the site of an earlier Indian village and a wild rice bed, taking the name of the community from that location.

A mill was started at the dam in 1871 by M.W. Heller, who was the first permanent settler to move his family here. Heller was also in charge of the first store, hotel and blacksmith shop, which made the settlement center for northern operations of Knapp, Stout and Company until the large stands of white pines in the area were exhausted.

The original plan of the city, made in 1875 under auspices of the Knapp, Stout firm, included a 100-foot wide thoroughfare that is still the heart of the business district.