The area received its name when, in 1836, Thomas Sugden, John Coats and William Garton came to a prairie and saw a huge bald-headed eagle soaring overhead.  The first claim was made by A. R. Hinkley but the first permanent settlers were Ebenezer Thomas and wife, who erected a house in 1836. Before the end of that year, the first mill in the town of Eagle was built in Eagleville.  When the southern branch of the Milwaukee & St. Paul Railroad came through the town in 1851, the village of Eagle Centre was created, leading to the eventual decline of other villages in the township. With the passing of time, the village name evolved to Eagle.

By 1880, the village was considered the third ranking community in Waukesha County in terms of commercial importance.  It could boast of two dry goods houses, two hardware stores, two clothing and tailoring establishments, a butcher shop, grocer, harness shop, milliners, salons, and a grain elevator and warehouse.

Eagle was nearly renamed Diamond City when it became known that a diamond had been discovered here in 1876.  While digging a well at the summit of what is today called Diamond Hill, workers found a yellow pebble, which was eventually identified as one of the largest glacial diamonds ever found in the United States.  The diamond ended up at New York’s American Museum of Natural History.  In 1964, it was stolen along with several other gems, including the Star of India sapphire.  Never recovered, the Eagle Diamond was likely cut and fenced.

Blessed with fine natural springs, the town of Eagle became known for resorts like Eagle Springs and Paradise Springs.  Called Minnehaha Springs at the time, Paradise Springs was once owned by Louis J. Petit, the Morton Salt king.  Eagle’s transition from an economy based on agriculture and railroads to one of recreation and tourism was furthered during the 1950’s and 1960’s as the state acquired land for the Southern Unit of the Kettle Moraine State Forest.  In 1976, Old World Wisconsin, an outdoor living ethnic history museum, opened.

In the Eagle area, the predominant cultural resource is also a recreational one – the Kettle Moraine State Forest.  The headquarters of the Kettle Moraine State Forest and its museum are located just outside the Village of Eagle.  Old World Wisconsin, said to be the world’s largest living history museum on rural life, is another predominant cultural resource that is contained within the Kettle Moraine State Forest.  Several buildings in the Village of Eagle and its surrounding area date from the nineteenth century and are on the National Register of Historic Places.