Lake Mills traces its history back to the 1850's. The first settler in the area was Joshua Thomas. He was soon followed by many others, a good share of whom were of Scandinavian descent. C. D. Smith incorporated the community in 1869.
Lake Mills has always been a prosperous community. The name Lake Mills comes from the fact that the town was built on what was then the shoreline of Rice Lake. There was also a grist and lumber mill located on the banks of the old town lake.
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