In October of 1754, explorer Anthony Henday, the first European to visit the Blackfoot natives on the western prairies, camped near the present site of Innisfail. Henday had travelled to the prairies seeking trade with the Blackfoot. Another early visitor to the area was Reverend John McDougall who developed a trail from Fort Edmonton to his mission church at Morley. This path in the 1870s wound through what is now the Innisfail district. Other early visitors were the men of the Palliser Survey Expedition. The Palliser crews measured Western Canada's systems of land sections and road grids. Poplar Grove was described by Captain John Palliser on one of his many expeditions as "one of the three best areas on the Canadian plains for planting and agriculture." The appearance of Poplar Grove was picturesque with thick poplar trees, stretches of prairie, heavy grass and rolling hills. There was also an abundance of wildlife such as prairie chickens, partridge and ducks.
The early history of Innisfail dates back to 1882 when only a few men had ventured to establish themselves along the trail area between Calgary and Edmonton. This old aboriginal trail was called "Wolf's Track" and the area was known as Poplar Grove. It became a well-known camping place for "freighters" because of the ample supplies of water, fuel and grass. Many people considered it a popular location for homesteading and many families chose the area for settlement. In the 1880s, stopping houses began to appear on the trail.
The Riel Rebellion in 1885 hampered settlement into Innisfail to some extent. In 1886, land immediately south of Innisfail was settled by two Americans, Arthur Content and Napoleon Remillard. They had journeyed from Montana to Alberta and settled on land south of Poplar Grove. There was no railway at this time, but a few houses were scattered along the trail for the convenience of the stagecoaches. In 1890, the railway reached Poplar Grove and by 1891, scheduled trains began running for the Canadian Pacific Railway. A road was also extended from Red Deer to Edmonton (Strathcona). By this time, most of the land had been taken up as homesteads. Business and professional men began to establish structures such as a hotel, drug store, general store and a lawyer's office.
One of the first settlers near Poplar Grove was Sandy Fraser. A stopping place was built by Jack and Ed Miller. These houses provided food and rest to area visitors. Others then came and squatted where conditions looked the most favourable. Isabella Sinclair, then "Miss Brown," was the first European woman to settle with her two brothers on the banks of the Red Deer River just west of the present site of Innisfail. People named Fraser, Quesnel, McCormach, West, Edwards, Rogers, Brown, Miller, Moore, Constantine, Varty, Dodd, Bill Kemp and Stiles are greatly responsible for the growth of Innisfail. These settlers along with a few Métis and aboriginals constituted the first settlement of Poplar Grove. By this time, the Canadian Pacific Railway had renamed Poplar Grove to Innisfail.
In 1891 the first post office was opened by Norman Stiles. For the first year mail was dropped off at Remillards stopping house until Mr. Stiles completed construction on the post office building in 1892. The first school building was opened and classes commenced with Miss L. Short as the teacher for the entire student body: nine pupils. She was hired for a nine-month year at $50 per month and the trustees decided to make the necessary furnishings for the school. Before the school building was completed, classes were held in a rental facility. The year 1892 also saw the construction of both St. Mark's Anglican church and the Presbyterian church.
The name of Innisfail is derived from an island in Loch ("lake" in English) Awe, Argylshire County, Scotland. The origin and meaning of the word goes back over 2,500 years to Celtic tribes. When the Celts lived in present-day England they suffered persecution largely as a result of their unique language. When they learned of an almost uninhabited island to the west of England, they believed it to be the Isle of Destiny. In the Celtic language, "Isle of Destiny" was pronounced "Innisfail." In fact, the original name of Ireland was Innisfail. Over the years there have been many versions of this particular name including Innisvville, Innisfree and Innishail. On November 20, 1903 the town of Innisfail was incorporated.