Rich with game, fish, and berries, Hayden Lake was a favorite gathering place for the Coeur d’Alene Tribe.
According to tribal legend, there came a time when the land stopped providing, and the medicine man advised them to leave, but no one wanted to go. One day a great whirlpool engulfed the chief as he fished from his canoe. Another version of this story tells of an Indian couple swept up by a whirlpool and drowning in the lake. Because of this, the tribe moved away from the lake.
In 1846, Father DeSmet was among the first white men to visit Hayden Lake. But it was not until the late 1870s that the first homesteaders, a Mr. Strahorn (first name unrecorded) and three soldiers from Fort Sherman (Matt Hayden, John Hager, and John Hickey) settled in the area. Legend has it that Hayden and Hager, whose homestead was on the site of the present-day Hayden Lake Country Club, played a game of seven-up to determine who should name the lake. Hayden won the card game. Hayden Lake’s early economy was based on agriculture, lumber, and recreation.
In 1906, a branch of the Inland Empire Railroad electric line extended to the Bozanta Tavern. Hayden Lake attempted to establish an agricultural economy specializing in fruit trees-an endeavor that was thwarted by severe frosts that decimated many of its orchards in the 1930s. The post office was established at Hayden Lake in 1907, and businesses developed at the south end of the lake. The town shifted from this area to Government Way as automobiles replaced rail transportation.
In 1959, the post office moved to Hayden Village. The area around Government Way is now incorporated as Hayden. The area from the west shore of the lake to a short distance west of Strahorn Road is incorporated as Hayden Lake.