It was settled in 1874, the first Mennonite settlement in Western Canada, and was originally called Gruenfeld (German: Grünfeld, 'green field').

[3] The East Reserve was established in 1873 after delegates from Imperial Russia were persuaded by William Hespeler to immigrate to Canada rather than the United States.

The delegates signed the Privilegium with the Canadian government that guaranteed religious freedom, military exemption, private schools, and land.

The original settlers of Gruenfeld, neighbouring Steinbach, and Blumenort were Mennonites of the Kleine Gemeinde denomination, fleeing religious persecution in Imperial Russia.

Gruenfeld took its name from a village just north of the Borozenko colony in southern Russia, which was the original home for many settlers.

[5] It was initially settled in 1874 by 16 families and surrounded by six smaller satellite communities – Heuboden, Schoenau, Rosenfeld, Blumenfeld, Steinreich and Hochstadt – each with populations ranging from two to eighteen inhabitants.

[6] In 1877, Lord Dufferin visited the Mennonite communities of Manitoba and stopped near Gruenfeld, where he viewed "half a dozen villages" in the distance.

[5] The community of Gruenfeld originally existed one mile north of Kleefeld’s present location in what is now a farmer's field.

The community has a central park, which includes tennis courts, playground, baseball and soccer fields, a hockey rink and large skating oval in the winter.