The area received its name when, in 1836, Thomas Sugden, John Coats and Mr. Garton came to a beautiful prairie and saw a "huge" bald headed eagle soaring overhead. The first claim was made by A.R. Hinkley but the first permanent settlers were E. Thomas and wife, who erected a house in 1836. Before the end of that year, the first mill in the town of Eagle was built in Eagleville. When the southern branch of the Milwaukee & St. Paul Railroad came through the town in 1851, the village of Eagle Center was created, leading to the eventual decline of other villages in the township. With the passing of time, the village name evolved to Eagle.

By 1880, the village was considered the third ranking community in the country in terms of commercial importance. It could boast two dry goods houses, two hardware stores, two clothing and tailoring establishments, a butcher shop, grocer, harness shop, milliners, saloons, and a grain elevator and warehouse.

Eagle was nearly renamed Diamond City in the mid-1800s when it became known that a diamond had been discovered here in 1876. While digging a well at summit of what is today called Diamond Hill, workers found a yellow pebble, which was eventually identified as one of the largest glacial diamonds ever found in the United States. The diamond ended up at New York's American Museum of Natural History. In 1964, it was stolen along with several other gems, including the Star of India sapphire. Never recovered, the Eagle Diamond was likely cut and fenced.

Blessed with fine natural springs, the town of Eagle became known for resorts like Eagle Springs and Paradise Springs. Called Minnehaha Springs at the time, Paradise Springs was once owned by Louis J. Petit, the Morton Salt king. Eagle's transition from an economy based on agricultural and railroads to one of recreation and tourism was furthered during the 1950s and 1960s as the state acquired land for the Southern Unit of the Kettle Moraine State Forest. In 1976, Old World Wisconsin, and outdoor living ethnic history museum, opened. That same year, the Queen of Denmark visited Eagle to attend the dedication of the Danish Farmstead at Old World Wisconsin.

EAGLE...We'll Give You A Smile!