In July 1850, a roadway connecting the upper Mississippi River and the Lake Superior country, named the Point Douglas to St. Louis River Road, and more commonly known as the government military road, went from just south of St. Paul to Duluth.

In 1861 the Lake Superior and Mississippi Railroad was organized with the financial help of Jay Cooke.

Many towns and villages, including Willow River, were organized once a lumber company set up shop.

In March 1874, the Kettle River Township was organized and Willow River at this time consisted of a railroad depot, water tank, wood yard, and two section houses built for the railroad hands.

Pine County records show that the three sections of land that would eventually make up the village of Willow River were homesteaded by Edward Clough, Albert Kinney, Peter Jarvis, Joseph Nebula, and Richard Abbott.

In the spring of 1890, Warren D. Fox and John Wisdom opened the Fox-Wisdom Lumber Company in Willow River.

By 1895, Kinney had leased his land to Fox-Wisdom, and Clough had sold all but 80 acres of his section in the northern part of the village.

It was located on the south side of the present day Willow River dam.

Sawmill operations began in the early spring and continued until the freeze-up of the mill pond.

The Fox-Wisdom Lumber Company and its employees made up the majority of property owners.

Willow River, like many other villages in northern Minnesota, owed its existence to the lumber industry.

In November 1891, Willow River was incorporated as a village by a vote of 37 to 18 in the upstairs hall of the Fox-Wisdom Company store.