Grinnell was founded as a "Yankee" settlement, that is to say it was founded and originally settled by settlers from New England (as well as those from upstate New York whose parents and grandparents had come to that region from New England) who were descended from the English Puritans who settled New England in the 1600s. Grinnell was founded in 1854 by Josiah B. Grinnell a Congregationalist from Vermont. The city was originally slated to be named "Stella," but J.B. Grinnell convinced other members of the colony to adopt his own name for the city, citing it as a rare and concise name. Grinnell was incorporated on April 28, 1865, and by 1880 Grinnell had a population of around 2000. Located at the junction of two railway lines (east-west line of the Rock Island Railroad and the north-south Minneapolis and St. Louis Railway), it became and remains the largest community in Poweshiek County.
Grinnell was a stop on the Underground Railroad.
Grinnell was also a stop along the (Mormon) Pioneer Trail, which spans across five states covering about 1,300 miles. The trail was traveled by an estimated 100,000 plus travelers from 1846 to 1869, including some 70,000 Mormons escaping religious persecution. The Pioneer Company of 1846-1847 established the first route; from Nauvoo, Illinois to Salt Lake City, Utah. Today, the Pioneer Trail is still visible through many parts of rural Grinnell.
Grinnell is home to Grinnell College, established in 1846. In 1889, Grinnell College and the University of Iowa played each other at Grinnell College in the first football game played west of the Mississippi River. On June 17, 1882, a tornado destroyed most of the college campus and much of the community with a death toll of 68. In 1889 fire destroyed most of the downtown area. Grinnell College is nationally recognized as a leading undergraduate institution. In July 2006, The New York Times included Grinnell in its profile of the 20 colleges and universities of "established or rising scholarship" which are fast becoming viable alternatives to Ivy League institutions, and is considered one of the 30 Hidden Ivies.
Grinnell was home to Spaulding Manufacturing. H.W. Spaulding began making carriages and spring wagons in Grinnell, Iowa in 1876. In 1909 the Spaulding Manufacturing Company added automobiles to its production line. At one time, the factory was the largest employer in the county. Automobile production ceased at the Spaulding factory in 1916 when it could no longer compete with the cheaper Ford automobile. The Spaulding factory site became home to the Spaulding Center for Transportation/Iowa Transportation Museum.