From the Taishō era until World War II, many railway lines were constructed around Japan, though the country's acute topography led many bus routes to substitute train lines.

The bus terminal was opened on 11 December 1935 as Joshu Kusatsu Station (上州草津駅, Jōshū Kusatsu-eki) with the commencement of bus service on the Joshu Kusara Line (上州草津線, Jōshū Kusatsu-sen) to Joshu Otsu Station (上州大津駅, Jōshū Ōtsu-eki) in Naganohara.

[1] The "Joshu" in the name was intended to avoid confusion with Kusatsu Station in Shiga Prefecture on the Tōkaidō Main Line.

The main concourse and gates (of which there are 9) are on the 2nd floor, along with a ticket office, internet terminals, vending machines, and a coffee and souvenir shop.

Located approximately 400 m (0.25 mi) south of the current Kusatsu Onsen Bus Terminal, the original Kusatsu Onsen Station (草津温泉駅, Kusatsu Onsen-eki) was a train station on the Kusakaru Electric Railway Line that operated from 1926 through 1962.