The town was platted in 1873 by A. A. Abbott and R. L. Thompson, who owned a sawmill, and who correctly anticipated the arrival of the railroad.
On July 5, 1908, a fire began in the middle of the business block and burned most of the stores. Local photographer E. L. Beebe made a number of photographs of the fire, and the resulting postcards were widely sold, and can still be found today. Two years later, in 1910 another fire started in downtown Kalkaska. Again, in 1925 downtown Kalkaska was devastated by the largest fire since the Fire of 1908.
In 1916, the noted author Ernest Hemingway visited and fished in Kalkaska, and later immortalized the town in his story "The Battler". A historical marker has been placed at the Rugg Pond Dam, on the Rapid River, where Hemingway reportedly fished one night from the power house.
On July 10, 1951, the Kalkaska State Bank was robbed by an armed man, who fled and later attempted to escape on foot through a nearby swampy area. After three days of what was termed the largest manhunt in Northern Michigan history, involving the FBI and local and state authorities, the gunman was captured south of the town. Named Raymond J. Turcotte, he had a long string of prior convictions, including manslaughter. Turcotte confessed to the bank robbery and served 18 years in the Michigan State Prison at Jackson, Michigan including a term for escape in 1961.
Discovery of natural gas and oil in the area during the 1970s lead to significant growth for the village; however, the growth has since subsided.
In 1993, the Kalkaska schools made national headlines when a financial crisis resulted in a two-month-long closure. Subsequent funding reform improved the outlook for Kalkaska and similar small rural districts in Michigan.