The city is named for a nearby 60-acre (243,000 m²) island. At one time, the island, was surrounded by sloughs and covered with many huge, beautiful trees, which were a refuge for thousands of birds, gave the town its name. After the installation of ditches and tile the area was converted to farmland, erasing the town's namesake.
KSTP-TV, Channel 5 weather forecaster, Barry ZeVann, (Minneapolis NBC affiliate at the time) often listed the temperature in Bird Island during his weather forecasts in the 1970s.
This town also is where the Renville County Fair Is Held.