Grinnell was founded in 1854 by Josiah B. Grinnell. 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 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 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.