People have lived on the land that is now Minnesota for at least 10,000 years. The earliest inhabitants—belonging to what archaeologists classify as the Paleo-Indian (or Big Game) culture—hunted large animals, primarily bison, from which they obtained food, clothing, and materials for shelter. A second identifiable cultural tradition, from around 5000 BC, was the Eastern Archaic (or Old Copper) culture. These people hunted small as well as large game animals and fashioned copper implements through a cold hammering process. The more recent Woodland Tradition (1000 BC–AD 1700) was marked by the introduction of pottery and of mound burials. From the 1870s to the early 1900s, more than 11,000 burial mounds were discovered in Minnesota—the most visible remains of prehistoric life in the area. Finally, overlapping the Woodland culture in time was the Mississippian Tradition, beginning around AD 1000, in which large villages with permanent dwellings were erected near fertile river bottoms; their residents, in addition to hunting and fishing, raising corn, beans, and squash. There are many sites from this culture throughout southern Minnesota.

At the time of European penetration in the 17th and early 18th centuries, the two principal Indian nations were the Dakota, or Minnesota Sioux, and, at least after 1700, the Ojibwa, or Chippewa, who were moving from the east into northern Minnesota and the Dakota homelands. Friendly relations between the two nations were shattered in 1736, when the Dakota slew a party of French missionaries and traders (allies of the Ojibwa) and their Cree Indian guides (distant relatives of the Ojibwa) at the Lake of the Woods, an act the Ojibwa viewed as a declaration of war. There followed more than 100 years of conflict between Dakota and Ojibwa, during which the Dakota were pressed toward the south and west, with the Ojibwa establishing themselves in the north.

Few scholars accept the authenticity of the Kensington Rune Stone, found in 1898, the basis of the claim that Minnesota was visited in 1362 by the Vikings. The first white men whose travels through the region have been documented were Pierre Esprit Radisson and his brother-in-law, Médart Chouart, Sieur de Groseilliers, who probably reached the interior of northern Minnesota in the 1650s. In 1679, Daniel Greysolon, Sieur Duluth, held council with the Dakota near Mille Lacs and formally claimed the region for King Louis XIV of France. The following year, Duluth negotiated the release of three captives of the Dakota Indians, among them a Belgian explorer and missionary, Father Louis Hennepin, who named the falls of the Mississippi (the site of present-day Minneapolis) after his patron saint, Anthony of Padua, and returned to Europe to write an exaggerated account of his travels in the region.

Duluth was in the vanguard of the French, English, and American explorers, fur traders, and missionaries who came to Minnesota during the two centuries before statehood. Among the best known was Nicolas Perrot, who built Ft. Antoine on the east side of Lake Pepin in 1686. In 1731, Pierre Gaultier de Varennes, Sieur de la Verendrye, journeyed to the Lake of the Woods, along whose shores he erected Ft. St. Charles; subsequently, he or his men ventured farther west than any other known French explorer, reaching the Dakotas and the Saskatchewan Valley. His eldest son was among those slain by Dakota Indians at the Lake of the Woods in 1736.

Competition for control of the upper Mississippi Valley ended with the British victory in the French and Indian War, which placed the portion of Minnesota east of the Mississippi under British control; the land west of the Mississippi was ceded by France to Spain in 1762. Although the Spanish paid little attention to their northern territory, the British immediately sent in fur traders and explorers. One of the best known was Jonathan Carver, who spent the winter of 1766–67 with the Dakota on the Minnesota River. His account of his travels—a mixture of personal observations and borrowings from others—quickly became a popular success.

There was little activity in the region during the Revolutionary War, and for a few decades afterward, the British continued to pursue their interests there. The North West Company built a major fur-trading post at Grand Portage, which quickly became the center of a prosperous inland trade, and other posts dotted the countryside. The company hired David Thompson away from the Hudson's Bay Company to map the area from Lake Superior west to the Red River; his detailed and accurate work, executed in the late 1790s, is still admired today. After the War of 1812, the US Congress passed an act curbing British participation in the fur trade, and the North West Company was eventually replaced by the American Fur Company, which John Jacob Astor had incorporated in 1808.

Under the Northwest Ordinance of 1787, Minnesota east of the Mississippi became part of the Northwest Territory; most of western Minnesota was acquired by the US as part of the Louisiana Purchase of 1803. The Red River Valley became a secure part of the US after an agreement with England on the northern boundary was reached in 1818.

In 1805, the US War Department sent Lieutenant Zebulon Pike and a detachment of troops to explore the Mississippi to its source. Pike failed to locate the source, but he concluded a treaty with a band of Dakota for two parcels of land along the river. Later, additional troops were sent in to establish US control, and in 1819, a military post was established in part of Pike's land, on a bluff overlooking the junction of the Mississippi and Minnesota rivers. First called Ft. St. Anthony, it was renamed in 1825 for Colonel Josiah Snelling, who supervised the construction of the permanent fort. For three decades, Ft. Snelling served as the principal center of civilization in Minnesota and the key frontier outpost in the northwest.

In 1834, Henry H. Sibley was appointed a manager of the American Fur Company on the upper Mississippi. He settled comfortably at Mendota, a trading post across the river from Ft. Snelling, and enjoyed immediate success. The company's fortunes took a downward turn in 1837, however—partly because of a financial panic but, even more important, because the first of a series of treaties with the Dakota and Ojibwa transferred large areas of Indian land to the US government and thus curtailed the profitable relationship between fur traders and Indians. The treaties opened the land for lumbering, farming, and settlement. Lumbering spawned many of the early permanent settlements, such as Marine and Stillwater, on the St. Croix River, and St. Anthony (later Minneapolis) at the falls of the Mississippi. Another important town, St. Paul (originally Pig's Eye), developed as a trading center at the head of navigation on the Mississippi.

In 1849, Minnesota Territory was established. It included all of present-day Minnesota, along with portions of North and South Dakota east of the Missouri River. Alexander Ramsey, a Pennsylvania Whig, was appointed as the first territorial governor, and in 1851, the legislature named St. Paul the capital. Stillwater was chosen for the state prison, while St. Anthony was selected as the site for the university. As of 1850, the new territory had slightly more than 6,000 inhabitants, but as lumbering grew and subsequent Indian treaties opened up more land, the population boomed, reaching a total of more than 150,000 by 1857, with the majority concentrated in the southeast corner, close to the rivers.

On 11 May 1858, Minnesota officially became the 32nd state, with its western boundaries pruned from the Missouri to the Red River. Henry Sibley, a Democrat, narrowly defeated Alexander Ramsey, running as a Republican, to become the state's first governor. But under Ramsey's leadership, the fast-growing Republican Party soon gained control of state politics and held it firmly through the early 20th century. In the first presidential election in which Minnesota participated, Abraham Lincoln, the Republican candidate, easily carried the state, and when the Civil War broke out, Minnesota was the first state to answer Lincoln's call for troops. In all, Minnesota supplied more than 20,000 men to defend the Union.

More challenging to the defense of Minnesota was the Dakota War of 1862. Grieved by the loss of their lands, dissatisfied with reservation life, and ultimately brought to a condition of near starvation, the Dakota appealed to US Indian agencies without success. The murder of five whites by four young Dakota Indians ignited a bloody uprising in which more than 300 whites and an unknown number of Indians were killed. In the aftermath, 38 Dakota captives were hanged for "voluntary participation in murders and massacres," and the Dakota remaining in Minnesota were removed to reservations in Nebraska. (Some later returned to Minnesota.) Meanwhile, the Ojibwa were relegated to reservations on remnants of their former lands.

Also during 1862, Minnesota's first railroad joined St. Anthony (Minneapolis) and St. Paul with 10 mi (16 km) of track. By 1867, the Twin Cities were connected with Chicago by rail; in the early 1870s, tracks crossed the prairie all the way to the Red River Valley. The railroads brought settlers from the eastern states (many of them Scandinavian and German in origin) to every corner of Minnesota; the settlers, in turn, grew produce for the trains to carry back to the cities of the east. The railroads soon ushered in an era of large-scale commercial farming. Wheat provided the biggest cash crop, as exports rose from 2 million bushels in 1860 to 95 million in 1890. Meanwhile, the falls of St. Anthony became the major US flour-milling center; by 1880, 27 Minneapolis mills were producing more than 2 million barrels of flour annually.

Despite these signs of prosperity, discontent grew among Minnesota farmers, who were plagued by high railroad rates, damaging droughts, and a deflationary economy. The first national farmers' movement, the National Grange of the Patrons of Husbandry, was founded in 1867 by a Minnesotan, Oliver H. Kelley, and spread more rapidly in Minnesota than in any other state. The Farmers' Alliance movement, joining forces with the Knights of Labor, exerted a major influence on state politics in the 1880s. In 1898, the Populist Party—in which a Minnesotan, Ignatius Donnelly, played a leading role nationwide—helped elect John Lind to the governorship on a fusion ticket.

Most immigrants during the 1860s and 1870s settled on the rich farmland of the north and west, but after 1880 the cities and industries grew more rapidly. When iron ore was discovered in the 1880s in the sparsely settled northeast, even that part of the state attracted settlers, many of them immigrants from eastern and southern Europe. Before 1900, Duluth had become a major lake port, and by the eve of World War I, Minnesota had become a national iron-mining center.

The economic picture changed after the war. As the forests were depleted, the big lumber companies turned to the Pacific Northwest. An agricultural depression hit the region, and flour mills moved to the Kansas City area and to Buffalo, New York. Minnesotans adapted to the new realities in various ways. Farmers planted corn, soybeans, and sugar beets along with wheat, and new food-processing industries developed. To these were added business machines, electronics, computers, and other high-technology industries. In 1948, for the first time, the dollar value of all manufactured products exceeded total cash farm receipts. In 1950 the state's urban population exceeded its rural population for the first time. Minnesota was becoming an urban commonwealth.

In addition to heightened demand for its agricultural products, Minnesota prospered as a result of new defense-related, high-technology, and other industries that grew up following World War II. Over $1 billion was invested in plants to process low-grade iron ore, called taconite, after the state's supply of high-grade ore declined. By the 1970s, environmentalists were targeting the ore producers for polluting Lake Superior with mineral wastes, and in 1978 the Minnesota Supreme Court ordered Reserve Mining Company to comply with pollution-control standards.

A successful merger of Minnesota's Farmer-Labor and Democratic parties, engineered in 1943–44 by both local and national politicians, revived the state's progressivist tradition after World War II. Hubert Humphrey (later US vice president) and his colleagues Orville Freeman, Eugene McCarthy, and Eugenie Anderson emerged as leaders of this new coalition. Their political heir, Walter Mondale, was vice president in 1977–81 but, as the Democratic presidential candidate in 1984, lost the election in a Republican landslide, carrying only his native state and the District of Columbia.

In the 1990s, Minnesota continued its economic diversification as service industries, including finance, insurance, and real estate, became increasingly important. As a result, it closed the decade with a low unemployment rate of 2.8% (when the national average was just over 4%). Though Minnesota, led by the Twin Cities, enjoyed an unprecedented decade of economic prosperity, it was generally acknowledged that agriculture across the Great Plains was in crisis by the end of the 1990s.

For many farmers, their problems had been exacerbated by weather conditions. In 1988, Minnesota's agricultural producers suffered from the worst drought since the 1930s. As a result of the severe flooding of the Mississippi River in 1993, almost half of Minnesota's counties were designated as disaster areas. Again in 1997, some of the most severe flooding in the century occurred in the Red River and Minnesota River valleys.

The state legislature closed its 1999 session having passed the largest permanent tax cut and one-time rebate in the state's history, amounting to $2.9 billion in tax relief. Though the accomplishment was hailed as a result of a multi-partisan effort, discord soon befell Minnesota government. By October, activists were attempting to recall Governor Jesse Ventura, elected the previous year as a Reform Party candidate, only to align himself with the Independence Party of Minnesota shortly after taking office. The following legislative session (in 2000) saw more veto overrides than in any other session of the last half century.

Republican Governor Tim Pawlenty, elected in 2002, sponsored an internet privacy bill early in his term, and stressed the need for higher education standards and attracting more high-tech jobs to the state. In 2003, Minnesota faced the largest budget deficit in its history, $4.2 billion. The legislature that year passed a $28.3 billion budget marked by spending cuts and no new taxes. Democrats, farmers, and labor leaders feared Pawlenty's commitment to no new taxes would amount to large spending cuts in education, health care, and other areas.