The original settlement in this immediate area was to the west of Bismarck’s location, where the Hubbard Trail and the North Fork of the Vermilion River crossed. It was originally called Franklin when it was founded in 1837, but it lasted only a few years. Later, in 1843, Brothers John and Samuel Myers built a mill near the site of Franklin, and a town called Myersville later grew up there.
In 1872, the C&EI Railroad went through the area; the tracks did not go through Myersville, but passed one and a half miles to the east. Gradually, the town moved toward the railroad on land donated by Charles S. Young and Dr. John B. Holloway. Young named the town Bismarck after the German statesman and chancellor Otto von Bismarck, who he so admired.
On September 13, 1997, the community celebrated its 125th birthday. Festivities, which were attended by about 2,000 people, included a parade, contests, historical exhibits at the local grade school, and multiple performances.
In 1998, the village of Bismarck was incorporated. The members of the first village board were Mayor Eleanor White, Julie Boersma, Pat Kentner, Chuck Mockbee, Lyle Milner, Diane Holycross, Don Evans, Alvina Van Pelt, and Betty Lewis.