[5] Mountain Lake was initially composed mostly of the 1,800 Low German (or more specifically, Plautdietsch) speaking Mennonites from Russia who settled there between 1873 and 1880.

Although the city has gradually become more diverse, with the more recent addition of immigrant groups including Lao, Hmong, and Hispanic people, a significant percentage of its inhabitants still have Mennonite surnames.

The city's official website recalls, "the first white settler to the area, William Mason, found a shallow 900-acre lake with three islands.

However, in 1937–1938 a dam, bridge, and outlet were constructed by the Works Progress Administration at a new site in Midway township to create a new Mountain Lake.

[7][9] The large island of the original lake – now just a hill amidst the surrounding cornfields – became a county park which has since 1973 been listed on the National Register of Historic Places.

[10] Archeological evidence suggests that early settler William Mason was not the first to appreciate the unique qualities of the original lake's island.

By the time Mountain Lake was formally incorporated in 1886, it had a population of three hundred people, primarily composed of Mennonites immigrating from southern Russia (present-day Ukraine).

However, a number of Manitoba Mennonites originally from the Chortitza Colony, near the present-day Ukrainian city of Zaporizhzhia, also settled in the Mountain Lake area.

[15] Because Mountain Lake was already an established community and its surrounding farmland largely surveyed, the Mennonites could not arrange themselves in the traditional communal villages they had been accustomed to in their Ukrainian colonies.

[14] On October 14, 1889, the Konference der Vereinigten Mennoniten-Brueder von Nord America was founded in Mountain Lake.

The physicians in charge were Dr. Piper of Mountain Lake and Dr. Sogge of Windom, who were assisted by three deaconess sisters.

[19] Minnesota State Highway 60 serves as a main route around the city, running generally east to west.

Mountain Lake is located in Minnesota's 1st congressional district, represented by Jim Hagedorn, a Republican.

[citation needed] Gilbert Esau, one of southern Minnesota's longest-serving legislators in state history, made his home in Mountain Lake.