Throughout its history, Sylvan Lake has had many names. Originally called Snake Lake by Aboriginals in the region, explorer David Thompson referred to it as Methy Lake, early settlers to the region named it Swan Lake, and eventually it gained its present name. Heavy timber around the lake discouraged early settlement by making the surrounding area inaccessible. It was not until 1899 that Alexander Loiselle and his son Louis, came from Michigan with their sawmill to settle at what was then called Snake Lake. By 1902, the district had attracted other settlers and Loiselle built a store and hotel to accommodate new residents.
The name Sylvan Lake was adopted in 1903 with the establishment of the post office. The town was, and continues to be, a major resort in the province and has been a tourist attraction since 1904. The lake also featured a stopping house which provided settlers a place to rest. The region was frequented by Aboriginals up until the beginning of WWI.
The construction of the Alberta Central Railway from 1910-1914 helped to develop the Sylvan Lake area by linking Red Deer and Rocky Mountain House. By 1932, the population of Sylvan Lake was approximately 185 residents. During the 1940s tourist attractions began to be constructed in and around the little village because the lake community had been attracting visitors from across the province.