Round Lake was established in 1882 when the Burlington Railroad built a line connecting Lake Park, Iowa, to Worthington, Minnesota. A site for a railroad station was chosen in fall of 1882, and the initial choice of name was Indian Lake, after the township in which it was located. However, a wealthy Chicago Board of Trade operator named Mr. O. H. Roche donated 20 acres (81,000 m2) of land for a townsite, and it was his wish that it be called Round Lake. Mr. Roche owned nearly 2,000 acres (8.1 km2) of land on nearby Round Lake in Jackson County, and he was apparently fond of the name Round Lake. A town was platted in December 1882 and the site was divided into 100 lots, not one of which were sold. Only two buildings were built in that first year, and both were constructed by the railroad. The railroad section foreman and his crew were the only residents of the new town, until October 1883 when E. A. Tripp came to town to assume duties as station agent. A post office named Indian Lake was established in March 1884, and Mr. Tripp became the postmaster. When another post office with the name Round Lake (located on Round Lake in Jackson County) was closed, the post office in the town of Round Lake assumed the name of that town. A few businesses moved to town, but by 1887, the town had a mere 34 residents. In 1889, the town was re-platted, correcting some legal issues with the original plat, and real growth began. Nine years later, Round Lake boasted numerous businesses, a bank, a newspaper, and 179 residents. Residents voted to incorporate the town, and on October 11, 1898, the first election was held, and town government began under President A. F. Diehn. A new $2,000 school was erected at this time.