The dolomite was formed 485 million years ago during the Lower Ordovician Period when a warm shallow ocean covered much of Minnesota and Wisconsin.

Dating the period the cave began to form has proven difficult because of erosion by glacial waters and the deposit of debris during the Wisconsin Glaciation from the nearby terminus of the Laurentide Ice Sheet's Superior lobe.

The commonly accepted theory of the cave's formation is that it was formed by a weak carbonic acid solution formed from rainwater and snowmelt that mixed with biogenic carbon dioxide found in the topsoil, which then infiltrated existing joints and fractures in the bedrock, expanding them into the openings that make up the cave's passageways.

The land was purchased by Friede and shortly after, on November 2, 1941, work was started to remove the glacial debris left in the cave that filled many of the passages on the second and third levels.

The newly christened “Crystal Cave” was set to open on the Memorial Day weekend of 1942,[2] but this plan was disrupted by heavy rains in the area.

[6] In late June 1942, the cave was designated a public bomb shelter when Henry Friede offered it for such a purpose to the Village Board of Spring Valley, Wisconsin.

At the time, the cave was the only shelter in the Midwest able to hold the entire population of the town it was intended to protect.