Atwater , once the largest village in Kandiyohi County , was begun as a railroad contractor's store in the summer of 1869 by Christopher L. Peterson. Prior to this time a post office had been maintained on Summit Lake , two miles west of the present village site. From 1869, until the village was incorporated in 1876, it was known variously as Summit Lake , Stockholm and Gennessee. When the town site was formally established, it was named for Dr. E. D. Atwater, of the land department of the St. Paul and Pacific Railroad which had the original land grant.

In 1871 Mark Piper, who was prominent in early county politics, opened a general store; and the hardware firm of McKinney and DeTar was organized. Getchell, Salter and Pines took over the store opened by Christopher Peterson, and added rooms for a hotel. Mr. Salter also opened Atwater 's first lumber yard the same year. Other new businesses  in 1871 included G. B. Dahl's blacksmith shop, Louis LaFoe's hotel, and Pullen's general store which was moved to Atwater from Harrison .

Dr. J. S. Gibson, Atwater 's first physician, arrived in 1873 and remained for many years. Two of the Gibson children are buried in an unkept cemetery on the shore of a small lake north of the village.

The next years marked a period of growth. As more settlers arrived to buy or "take up" land, the village grew to serve their needs. For a number of years Atwater had four elevators which served farmers within a radius of thirty-five miles. Mark Piper, a curbstone grain buyer, also helped make Atwater a grain-buying center, by paying consistently high prices. James Strong opened a livery stable in 1878, which later became Strong Motor Co., the second oldest Ford dealership in Minnesota . A Mr. Sager opened a mineral water spa beside a small lake within the village limits, which drew people from a number of states who came to bathe in the mineral water.

In 1891 a fire swept the business district, and destroyed seven buildings with most of their contents. By an ironical quirk most of the residents of Atwater had reduced their insurance coverages because of a recently organized volunteer fire department, and most of the firemen were out of town when the fire broke out.

Atwater 's four churches were organized between 1868 and 1891. Immanuel and Trondhjem  (now Bethlehem ) Lutheran Churches were all established in 1868. The First Methodist Church was organized in 1873, and a Presbyterian Church was organized in 1891. The latter was sold to the Lake Elizabeth Baptist Church , when the congregation decided to move to Atwater. ; it has subsequently disbanded. A Catholic Church is located in the neighboring town of Kandiyohi .

Atwater 's first band was organized in the railroad depot in 1875, and merged into the Atwater High School Band which was organized in 1936. Atwater 's Roller Mill was built in 1898, and destroyed by fire in 1944.

A village hall was built in 1887 and was the center of community affairs for over half a century when it was wrecked and the village purchased a business building for a hall, meeting place, city offices and library. It was replaced by the former Atwater Train Depot, moved a block north from its railroad site.

Records of Atwater 's schools were lost in the fire of 1891, so it is unknown when the first school was organized, but Miss Monrovia L. Hutchinson was the first teacher. A school was built in 1898, with major additions and improvements in 1936 and 1955 and 1980. The school district was consolidated in 1953, and again in 1996 when the Atwater-Cosmos-Grove City district was formed with the high school moving to a new facility just south of Grove City . An elementary school remains.

While local farms have consolidated over the years, farming is still a very important part of the community. The Atwater Cooperative Creamery Association served farmers of the area since 1891at one time handling 30,000,000 pounds of milk a year and producing 1,400,000 pounds of butter. A Soil Center was subsequently added, the Creamery portion dropped, and the Association merged with Central Lakes Coop of Willmar in 1996. Three independent local businesses, Discount Grain Systems, Whitcomb Construction and Atwater Equipment Co., presently cater to this sector.

In 1902 the village installed a municipal water system and a gas plant. With the coming of electricity the gas plant was abandoned, but the village still maintains water and sewer systems. Today, the town enjoys cable TV, a high-speed wireless internet connection, a fiber optic line commercially available, two community parks, a fishing pond, and the 18-hole Island Pines Golf Course on the edge of town.

During the ag depression of the 1920s, and the Great Depression of the 1930s, Atwater lost its two banks. A new Atwater State Bank was established in 1932 and has remained independent ever since. In 1985 the owners purchased the State Bank of Kimball, with which it is still affiliated.

As suggested above, the town has suffered the ravages of loss and consolidation, especially in the commercial arena. The farm recession of the 1980s was hard on the business community.  With the vital and growing county seat of Willmar only 14 miles to the west, it has been difficult to compete. Nevertheless, Atwater has managed to prosper. In recent years several new businesses have sprouted or expanded: Jennie-O Feed Mill and Farms, American Industrial Refrigeration, Animal Health Services, Paws Floral, Thrivent Financial for Lutherans. Several older businesses remain strong: Atwater Ford, Hamilton Motors, Dave’s Spur, Holm Plumbing & Heating, Vern’s T&C Grocery, Atwater State Agency, American Family Insurance, Home Agency, Mary’s Family Restaurant, Revy’s Restaurant and Lounge, Atwater Hotel (in restoration), Jimmy’s Pizza, Peterson Hardware, Behm’s Feed Mill and a few others. We’ve held on to our elementary school and 3 churches in town. The Presbyterian Family Foundation, Kandiyohi County Day Activity Center and St. Francis Halfway House the Atwater Funeral Home all have facilities in town. We also enjoy a full time dentist and medical doctor, the latter in conjunction with Affiliated Medical Clinic of Willmar. An attractive new post office was built in 1999.

The City’s prospects are good. New homes are being built at a modest rate and the population has enjoyed a slight increase. The Atwater Area Living at Home Block Nurse Program is a model throughout the region for assisting the elderly to live in their homes and inspiring a private developer to construct an assisted living facility. The Atwater Economic Development Authority, successor to the Atwater Development Assn., has erected 10 units of attractive rental housing in the last few years and is aggressively looking for new projects. The Atwater Chamber of Commerce holds its annual festival in mid June: Revy’s Bar has its motorcycle rally (the Rumble) the last weekend of July, and the Atwater Threshers offers a well-received old-time threshing exhibition annually the weekend after Labor Day. The Historical Society has a very fine collection of local curiosities and military uniforms, including some biscuit rations from the Civil War. The American Legion, Lions, Masons, and West Central Snowdrifters all have representation in town. The town has been given a boost recently with the decision to locate a 45 million gallon ethanol plant, Bushmill’s, Inc., just outside the city limits, made possible by a JOBZ designation. For a town of 1100 population, it is sometimes surprising how much is going on.

By a Group of Atwater Citizens