Inkpaduta, a Mdewakanton Sioux Indian leader in the area from the 1850s until his departure to join Sitting Bull's band in Manitoba and Saskatchewan, camped at at the south end of the lake that gives the town its name both before and after his participation in the Spirit Lake massacre of 1857, and the Dakota War of 1862, also known as the Sioux uprising.
By the time of the Dakota War of 1862, during the American Civil War, Inkpaduta had already been driven out of Minnesota, with the help of other Dakota who didn't wish to put their own annuity goods and money at risk.