In 1891, a trading post became the original settlement along the banks of the Spirit River. Ranching in the area started as early as the 1840s and farming in the 1880s. The first school opened in 1910. In 1915, to the northwest, on Section 22, the Edmonton, Dunvegan and British Columbia Railway subdivided a townsite called "Spirit River Station". The residents and storekeepers at the old settlement then moved, creating a village in 1916. On February 16 of that year, the Herald Tribune reported that McRae & Co. opened a general store. Spirit River was incorporated as a town in 1951.