Okauchee was settled in 1839 by Orson Reed who built a mill at the current Foolery’s location. His mill was the first building constructed in the community and provided lumber for the nearby Watertown Plank Road in 1850. The following year the McConnell’s constructed a stagecoach inn to serve travelers along the Plank Road. This building still stands at the east end of the roundabout–at the center of downtown Okauchee. Within two years, the village also had a railroad depot at the end of Shady Lane, before the current highway 16 was constructed.

It was in the early part of the twentieth century that Okauchee became a resort destination for Milwaukeeans and people from the Chicago area. Tourists came by train and walked or were picked up to go down Shady Lane to The Landing on Okauchee Lake. The Landing was orginally a meeting place but eventually became a building and place of business for lake visitors. This building still exists today and is a family residence. From The Landing, stairs were taken down to the lake shore to board boats that escorted them to the many resort hotels and cottages on the lake. By 1927 Okauchee boasted eleven hotels among its complement of tourist-oriented businesses.

During the years of prohibition, many of these hotels were run by gangsters operating bootlegging enterprises, brothels, casinos and speak easys.