In an effort to protect its Minnesota territory from British encroachment and Native American threats following the War of 1812, Camp Coldwater was established between 1820 and 1824 near the site of the future fort. In 1825, construction of Fort Snelling was completed, taking its name from Colonel Josiah Snelling. Snelling was known for heavy drinking and dysentery, of which he died from complications in 1827.

James J. Hill was born in 1838 in the small town of Eramosa Township in what-is-now Ontario. Due to a accident in his youth with an arrow, he was blinded in the right eye. While he had only nine years of formal schooling, he attended Rockwood Academy with much success. However, following the death of his father in 1852, he left school to begin working as a bookkeeper in Kentucky. After moving to St. Paul, Minnesota, Hill obtained work as a bookkeeper for a wholesale grocer. Eventually, he struck out on his own, providing wood to fuel Fort Snelling.