It was called Makato Osa Watapa by the Sisseton Dakota,[9] meaning "the river where blue earth is gathered.

"[10] The French explorer Pierre-Charles Le Sueur established Fort L'Huillier near the river's mouth in 1700 for the purpose of mining the clay, either in the mistaken belief that the clay contained copper, or as a ruse to secure funding from his patrons for his fur trading activities.

[11] The Blue Earth River begins at the confluence of its west and middle branches, approximately five miles (8.0 km) north of Elmore in southwestern Faribault County, Minnesota.

[11] According to the Minnesota Pollution Control Agency, about 84% of the Blue Earth River's watershed is used for agriculture, primarily corn and soybeans.

The river is one of the most polluted in Minnesota, with elevated levels of sediment, bacteria, nitrates, phosphorus, mercury, PCBs, and pesticides, contributed in part by runoff in the watershed.

Fecal coliforms, contributed by manure fertilizers, livestock waste, substandard septic tanks and outdated sewer systems, are often at levels considered by the state government to be unsafe for swimming.