Settlement in the Hackensack area began in Lothrop, a few miles north of the current community. James Curo built a log building, which housed his living quarters, a grocery, a general store, and a post office. The Ojibwa Indians mostly inhabited the area, but settlers began building around Curo's enterprise as early as 1884. When the railroad pushed north in 1896, Lothrop was abandoned. No trace of the town exists today.

Hackensack was officially put on the map in 1902, and Bye Bartlett and Curo, who came to the area from Hackensack, N.J, decided its name. Industry at the time centered on logging and a sawmill. The Minnesota and International Railroad came through town on the site of the current Paul Bunyan Trail. Most of the retail shops were built of wood, many of which were destroyed by fires. Several of these structures were replaced with brick structures.

In 1915 the Royal Ice Cream Parlor was a busy place-serving tourists in the area and was also known as a place to buy fireworks. There were several hotels, general stores, and even a hospital on Pleasant Lake. There was a bank, but the depression led to its demise.