[7] The bones and heart of the Sioux chief Crazy Horse were reputedly buried along this creek by his family following his death in 1877.

The town lies within the Pine Ridge Reservation, territory of the Oglala Lakota (Sioux).

On December 29, 1890, in the same area, in an incident known as the Wounded Knee Massacre, the United States 7th Cavalry killed more than 300 men, women and children who were being relocated to the Sioux reservation at Pine Ridge.

On February 27, 1973, during the Wounded Knee Occupation, the American Indian Movement (AIM) occupied the Pine Ridge Reservation near Wounded Knee in protest against the federal government and its policies related to Native Americans.

According to the United States Census Bureau, the CDP has a total area of 1.1 square miles (2.8 km2), all land.