The resort village's name is derived from the Plains Cree word mistasiniy or mistaseni (meaning "big stone"), which refers to a 400-ton glacial erratic that resembled a sleeping bison.

It once rested in the Qu'Appelle Valley and served as a sacred gathering place for the Cree and Assiniboine peoples before Lake Diefenbaker was built.

During the South Saskatchewan River dam project, the erratic was in the flood path of the new reservoir that would become Lake Diefenbaker.

In 1966, the Prairie Farm Rehabilitation Administration had the rock blasted apart with explosives, despite efforts by groups to save it.

The resort village of Mistusinne is governed by an elected municipal council and an appointed clerk that meets on the third Saturday of every month.