[3] Spencer hosts the Clay County Fair, held annually in September and averaging more than 300,000 visitors.

The town's late library cat, Dewey Readmore Books, became known throughout the world before his death in 2006.

When Clay County was established in 1851, it had no local government and official business was done out of Sergeant's Bluff, nearly 100 miles away on the Missouri River.

In 1859, Judge Hubbard of Iowa's 4th Judicial District authorized a committee to find a site for the county seat.

This committee selected "Section 20 of Spencer Township", located roughly in the center of the county near the confluence of "Sioux River and Ocheydan Creek", as the site for the "seat of justice".

The site of the proposed town languished, uninhabited, for many years, the area coming to be called "Spencer Grove".

Most of the men were Union veterans of the Civil War from Wisconsin and were claiming land under the Homestead Act of 1862.

While in Emmetburg, they were told of Spencer Grove and decided it would make a nice place to establish their homesteads.

In October 1866, Spencer Grove resident Romanzo Coates was elected as Superintendent of Clay County Common Schools; he established the first schoolhouse on the upper level of his cabin and appointed his wife as the first schoolteacher.

Romanzo Coates, already the superintendent of schools, was also made the town's first postmaster, with his cabin used as the first post office.

In 1869, Garrett Marcellus moved to Spencer and established a mill on the Little Sioux River about one mile downstream.

The plat for the Town of Spencer was filed on May 8, 1871 and approved by Judge Snyder of Iowa's 4th District Court.

Between June and September 1878, the Chicago, Milwaukee & St Paul Railway built a line west from Algona to Spencer.

On June 22, 2024, a massive flood, which submerged much of the city, and a power outage for almost a full month, it began when both the Little Sioux and Ocheyedan rivers overflowed due to heavy rainfall.

The flooding here was the result of a larger system of storms that saw roughly 4–6 inches of rain dumped on various counties in northwest Iowa, southeastern South Dakota and southern Minnesota in a 24-hour period.

Clay County received approximately 14 total inches of rain the week of the flooding.

On June 24, President Joe Biden approved a request for a disaster declaration in the state of Iowa which would allocate federal funds for flood victims in Clay, Emmet, Kossuth, Plymouth and Sioux Counties.

On June 30, workers from FEMA began canvassing Clay County and working with homeowners affected by the floods.

Arts on Grand is a cultural attraction and nonprofit organization which supports local area artists with a gallery shop, exhibits, classes, workshops, tours, fundraising events, and other activities.

[22] The Curiel-Reynolds School of Visual Arts (CRVA)[23] relocated from Detroit, Michigan to Spencer in 2007.

His story, with much about the town of Spencer, is told in Dewey: The Small-Town Library Cat Who Touched the World (2008), by Vicki Myron with Bret Witter,[25] and related children's versions and audio books.

Numerous works of art around town feature images of Dewey including “The Gathering: Of Time, Of Land, Of Many Hands," a community mosaic project designed to celebrate the Millennium.

[29][30][31] At the height of Great Lake's service, the airline provided non-stop flights to several locations in the continental United States using Beechcraft 1900D and EMB Brasilia aircraft.