The town of Stettler was named after Carl Stettler, a native of Switzerland who came to Alberta in 1903 and filed on a homestead 2 miles (3.2 kilometres) east of the present site of Stettler. His homestead was the centre of a Swiss-Germany colony that set up a hamlet with a post office on his land in 1905. The post office was named "Blumenau" and Carl Stettler was the first postmaster.
In the fall of 1905 the townsite, which later became Stettler, was put on the market because the Canadian Pacific Railway (CPR) had just reached this site. The Canadian Northern Railway (CNoR). reached Stettler in 1911.
In the meantime, the hamlet of Blumenau had acquired a lumberyard, two general stores, a tavern, a blacksmith shop, bakery and feed store. Local business owners, recognizing the advantage of rail transportation, moved the hamlet of Blumenau, lock, stock and barrel, to the present site of Stettler. Carl Stettler was the first postmaster, and as a result, the town was named in honour of its most active citizen.
In the spring of 1906, Carl Stettler built the National Hotel on the site of the present Stettler Hotel. This hotel burned down in 1908 and he started to build another, the National Hotel, on the same site in 1909. The hotel was only partly built when he sold his interest to R.L. Shaw who completed the hotel. In 1942 The National hotel burned down and was replaced by the Stettler Hotel in 1948. Mr. Wilson Pyper built the first hotel on Railway Avenue, the Alberta Hotel.
Stettler was established a village on June 30, 1906 and incorporated as a town November 23, 1906. The first school was held in J.B. Griffith's warehouse and the first school building was constructed in 1907.
A notable citizen was the late William Brighton Gray, a pioneer, cowboy and rancher. Gray was known for his loyalty and generosity, his kind and keen sense of humour, and his unflinching devotion to duty and principle. William Gray was employed by the Bank of England for six years, then entered the British Navy for two years, followed by four years of foreign travel which brought him to western Canada in 1882. For a number of years he ranched near Buffalo Lake. In 1906 he was appointed Dominion Land Agent with headquarters at Stettler. During his lifetime William Gray held many different positions including agent for the Hudson's Bay Company and Canadian Pacific Lands, Registrar of Vital Statistics for the Stettler district, Official Auditor and Issuer of Marriage Licences, Town Clerk when the town was first incorporated and Justice of the Peace from the beginning of civil government in Stettler. In 1946 he sold his collection of rare coins, Indian costumes, guns and other artifacts to the Alberta government. He was one of the outstanding builders of Stettler and a father to the town. Aside from the distinction of being the oldest Justice of the Peace in the town, Gray was honoured with various offices and was prominent in the business and civic life of the community.
The first bank, The Merchant's Bank, was established in a tent in 1905. The first hospital was a private 8-bed hospital initially set up in a rented building by Dr. Donovan in 1909. In 1912 a 10-bed hospital was operated by Dr. Franchum. Next, a 12-bed hospital was opened by Dr. Creighton in 1914 and in 1915, a 6-bed nursing home was operated by Mrs. Mills.
The first lawyer to establish a practice in Stettler was H.T. Harding who later went into partnership with the late Judge A. A. McGillivray, formerly of Ponoka.
In 1913, the town installed a steam-electric plant with a capacity of 150 kilowatts, later increased to 200 kilowatts in 1923. This plant supplied light and power until the Canadian Utilities power line entered the town in 1928.
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