The town is notable for having relocated its central business district due to flooding on the nearby Kickapoo River during the 1970s, and has become a case study in best practices for managed retreat.

[5] Soldiers Grove was first settled in 1856 by Joseph H. Brightman, who began a sawmill at the site to process logs rafted down the Kickapoo River.

In 1867, the village's name was changed to "Soldiers Grove" to commemorate the troops who had camped in the area during the Black Hawk War.

[6] In its early years, Soldiers Grove depended upon the Kickapoo River for timber rafting and hydropower for flour and lumber mills.

The village's proximity to the river became a liability in the early twentieth century, however, when major floods began to afflict the settlement.

Following the last of these incidents, Soldiers Grove and other area communities petitioned the United States Congress to provide funds for a flood control project.

In the meantime, a 1974 floodplain zoning ordinance had already taken effect in Soldiers Grove, prohibiting new construction and severely limiting maintenance options near the river and crippling the village's downtown area.

In the aftermath of the disaster, $900,000 in federal funds were finally provided to assist in relocating the village's business district to higher ground.

Despite the village's location in the northern state of Wisconsin, studies showed it was feasible for new buildings to achieve a majority of their heat from solar energy.

Consequently, the village council, led by eco-champion Daniel Naccarato, enacted an unprecedented ordinance requiring all new commercial buildings obtain at least 50% of their heat from the sun.

To meet the solar energy requirements, buildings in the new business district were constructed with heavy insulation and earth-berming to supply thermal mass.

South facing roof slopes and windows were built to capture maximum sunlight, and blowers and hydronic systems were installed to circulate the collected heat.

In addition to solar heating, the village of Soldiers Grove passed ordinances for the new business district that mandated handicapped accessibility, placed restrictions on advertising signs, and promoted the use of natural building materials.