Founded in 1854, the city of Grinnell is named for abolitionist Josiah B. Grinnell, to whom Horace Greeley gave the famous advice: "Go West, young man, go West."

J. B. Grinnell was a leader in state government and chaired the legislative committee that planned Iowa's system of public education. he was also a staunch opponent of slavery. The city of Grinnell became a stop on the Underground Railroad, providing shelter to abolitionist John Brown and allowing nearly 1,000 freed slaves to pass through town.

Part of Grinnell's large-scale development can be attributed to the railroad, which arrived in 1863. A bustling downtown business district quickly developed around the train depot. Though a fire in 1889 destroyed the original downtown business district, the town rapidly recovered and business continued to prosper.

Grinnell's first industry is still in business today.
The Morrison Glove Factory (now known as DeLong Sportswear) was established in 1856. By the 1900s, the company was the world's largest manufacture of gauntlet gloves. Several other industries have had an impact on Grinnell's commercial development, including transportation manufacturing (buggies in the 1800s, then automobiles until 1916), playground equipment manufacturing, and milling. Agriculture has also been a strong contributor to Grinnell's economy.