​The earliest known inhabitants of the Herman, MN area were Dakota Indians.  They hunted buffalo, deer, elk and other prairie wildlife.  True to their reputation, Dakota Indians left behind few traces that they had once lived here.  The most visible and even one of those are hard to see, are two Indian Mounds southeast of Herman near Niemackl Lake Park.  Niemackl Lake Park is a wooded peninsula, a near-island, that contains the largest expanse of native trees in the area.  The trees were protected from the fires that swept over the rest of the prairie by the lakes and sloughs that surrounded them.

​The first white settlers in the area came in 1869.  Christian Olsrud, his wife and their four children dug a home into the side of a small hill on the south shore of what is now know as Olsrud Lake, in Macsville Township, about three and one-half miles east of Herman.​

What they and the other early settlers saw when they came to the area, according to Gary Hedstrom in his history of Herman's early years, Blossom on the Prairie, from which all of this historical information comes, is "grass. Miles and miles of grassland.  A boundless prairie interrupted only by the numerous lakes and sloughs, along which grew small groves of trees".  Those early settlers and their descendants and followers turned almost all of that native prairie into productive farm land.
​The Village of Herman was born in June 1871, when Sven Frogner opened first a general store near the corner of what is now Highway 9 and 6th Street and then a grain depot.  In August as Frogner expected, the first Division Railroad Company extended its western railroad line from Benson to Breckenridge and built one of its stations on the new line near Pullman Lake, a source of water.  The railroad called that station "Herman" after Herman Trott, one of its land agents.