Now well known for its scenic, historic, and recreational assets, Taylors Falls was once known as a prominent river boat and logging community. First established in 1838, at the head of steamboat navigation, Taylors Falls became a vital supplier of provisions and building materials for the inland communities and surrounding logging camps. Taylors Falls was named for one of its earliest settlers, Jesse W. Taylor, and the falls (actually a series of rapids) at this point in the St. Croix River.

Although most of the surrounding countryside was settled by Swedish immigrants, the early population of Taylors Falls was mainly of New England heritage. This heritage is reflected in the early architecture of Taylors Falls, much of which has been preserved. About one-third of the structures in Taylors Falls were built over a century ago, with a great many dating back to the 1850s. Most of the older residences are to be found in the historic areas of Bench and River Streets, and the Angel Hill Historic District. In addition, unique 1930s stone buildings in Minnesota Interstate State Park close to downtown Taylors Falls are on the National Historic Register.