The community is located at the junction of Minnesota State Highway 4 with County Roads 6 and 10.

Godahl was settled by Norwegian immigrants and named in honor of their home, called Gode Dahl ("Good Valley").

[2] The town had a post office from 1894 until 1907, and a station of the Chicago, St. Paul, Minneapolis and Omaha Railway.

[2] The community failed to develop, and for many years the only remnant of its commercial aspirations was the Godahl Store, a cooperative built in 1894[2] and now listed on the National Register of Historic Places.

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