Farmers, woodsmen, and tradesmen homesteaded this area starting in the 1800s, drawn by the clear sparkling waters of the Sugar River. Many of the homesteaders were English, Scotch, Irish, German, Swiss and Danish. The corner of Butman and Grass Lake Roads was first known as "Shotgun Corners" and later, when a lumbering camp expanded into the area, as "New Headquarters", an address more fitting a growing business. In 1878, the name of the community was changed to "Millsville" and boasted schools, churches, stores, a post office and a railroad line running to Merideth, Gladwin, and Beaverton. The post office, the railroad, and the town were abandoned after the lumber ran out and the families moved on.
The area was largely farmed where it was fertile and hunted where it wasn't until the mid 1960's when N.E. Isaacson & Associates began buying up large tracts of land that would later become Sugar Springs. Development of the properties began in 1971. The first house was built in 1972.
The idea of Sugar Springs began well before its first properties were developed. N.E. Isaacson envisioned a secluded community development of second homes that would provide Michigan's working families a place to escape to sports, recreation, and nature. He planned a place within easy reach of home that would include a wide array of quality family amenities nestled within the natural environment. His plan included innovations to carry the vision decades in the future. Sugar Springs was the first development of its kind in Michigan to feature clustering of home sites within adjacent natural common greenways and the first lake community featuring central sewers to all home sites for the protection of the lakes.
In 1978, the Sugar Springs Property Owners Association was formed to eventually assume responsibility from the developer for managing programs, common areas, and facilities. The developer turned over the operations of the complex to the Property Owners Association in 1987.