The area around Lester Prairie was settled in the 1870s, during a time of serious financial depression, followed by years of grasshopper plagues. Farmers suffered greatly, and a large number of farms were foreclosed.
At this time, many people were emigrating from Europe and moving from other parts of Minnesota to buy farms in Bergen Township. They also established businesses in the newly formed village of Lester Prairie.
The town had its beginnings when the Great Northern Railroad built its line in December of 1886.
Lester Prairie was named “Lester” in honor of Maria Lester and her family, who settled in the area, and “Prairie” for the little prairie on which it was situated.