In 1856, Norwegian immigrant Osmund Osmundson moved to Wheeling Township in Rice County. He homesteaded the present site of Nerstrand, building a house and farm, and began to envision a town on the site. In 1877, he built a store on what became the right-of-way for railroad tracks on what is now Main Street. In 1885, the Minnesota and North Western Railroad (later the Chicago Great Western Railway) was constructed, extending from Lyle, Minnesota to St. Paul, and Osmundson platted the town on the line, naming it after his hometown of Nedstrand in Tysvær, Norway.

The town was the center of a significant Norwegian immigrant community, which included people in the surrounding township and county. Some, like Tosten Bonde, who lived just outside the city limits, and Osmundson became state legislators. Thorstein Veblen, who similarly grew up just outside of the town, became a noted sociologist and economist.

The town incorporated in 1897 and its first city hall, built in the same year. It proved too small within a few years, and a new city hall was built in 1907. The Nerstrand City Hall building was placed on the National Register of Historic Places on April 6, 1982 alongside the Osmund Osmundson House and Tosten Bonde's farmhouse. The Thorstein Veblen Farmstead became a National Historic Landmark. The railroad tracks have since been removed.

NorthfieldWiFi built out its high speed wireless broadband infrastructure in March of 2011. Since then, NorthfieldWiFi has been offering high speed internet services to residents in town as well as out of town. Our service offerings are the same no matter where you live. Whether you within the city limits, or in the country, you can experience the same great high speed internet experience.