During the 1870s and 1880s, newspaper advertisements in eastern states drew settlers to Minnesota, helping create New York Mills from a wilderness into a community where people sought work and family life. After the Northern Pacific Railway reached Otter Tail County in 1871 and passed through New York Mills, supplies for Dr. Van Aernam's sawmill arrived by train, supporting local mill hands, sawyers, and homesteaders as they established farms. Van Aernam, Olcot P. Boardman, and George L. Cornwell organized the New York Mills Company in Olean, New York, in 1872, and the town became known for its lumber industry and as a shipping center for lumber from surrounding areas, including output from Paddock's Mill about 12 miles away. Construction of downtown buildings began in 1876, but after the New York Mills Company dissolved in 1882 and its mill was torn down, the Dakota Lumber Co. built a new mill near the depot, while two other lumber mills also operated. Because the company retained much of the village land after it went out of business, disputes among its partners and agent tied up most property in litigation for eight years until lawyer William V. Smith of Olean, New York, began working in 1890 to resolve the problem; he later gave Smith Park to the village. Olaf Pary, who arrived in 1881 to open a general merchandise store, erected the village's first brick building in 1885, a structure now used as the New York Mills Regional Cultural Center. New York Mills also became a center of Finnish culture for more than 100 years: August Nylund arrived in 1884 and founded the Uusi Kotimaa, Rev. J.W. Lahde started the Amerikan Suometar that fall, and their consolidated paper remained here until moving to Superior, Wisconsin, in 1931; the Minnesotan Uutiset was then published in New York Mills from 1932 to 1985, renamed the Amerikan Uutiset in 1960, while two other Finnish newspapers appeared briefly in the 1890s. In the twentieth century, Howard Lund returned to New York Mills in 1948, built his first aluminum duck boat there, began producing aluminum hunting boats in 1950, incorporated the business in 1958, later formed Lund Metalcraft, Inc., expanded to Wisconsin in 1968 and Manitoba in 1972, and introduced the innovative Mr. Pike 16 fishing boat in March 1978. Though ownership of Lund Boats changed over time, the company continued to grow, with employment rising from fifteen in 1957 to 520 in 2020, and boat manufacturing remaining in New York Mills.