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Beginning in April of 1846, the Coeur d'Alene Indians were the first known inhabitants of Hayden Lake. They camped along the shoreline and lived on an abundance of berries, bulbs and fish, before moving on as natural resources became scarce.

During 1878, Matt Heyden homesteaded the southwestern shore and developed an extensive farm including the first fruit orchard planted in the area. Heyden, and a man named Hager, were friends who often played cards together, a pastime that, according to history, would lead to the naming of the lake. The two men wagered the right to name the lake in a game of "seven-up." Matt Heyden won, and therefore the lake became known as Heyden's Lake. The spelling of the lake changed over time.

At one point in Hayden Lake's history, as many as four steamboats served the logging and mining interests. Hunting and fishing were also excellent, and attracted many visitors. The large number of recreational opportunities, offered in a beautiful natural setting, has led to the area sometimes being referred to as the "Switzerland of America."

The F. Clark Mansion, a home with perhaps the most fascinating heritage of any in Idaho, is located on the south shore of Hayden Lake. The details of the mansion's past, still within hearsay, would make an absorbing novel. The Hayden lake villa, sometimes called Honeysuckle Lodge, was designed as a summer home for the Clarks and was finished in 1912. The 15,000 sq. ft. house boasted a multitude of rooms, which took several years to complete and was the most expensive house in the state at that time. Today the home is being operated as an elegant country inn called the Clark House of Hayden Lake.