Daniel Delaney and a man named McLeod camped on the shores of the lake in 1855, becoming the first white men of record to visit the area. John Masters, a land developer who came in 1856, gave the body of water its name. Diamond has long been a community lake where people from the area came for relaxation. In 1928, a group of men from the Atwater area, led by Joe Buer, A.E. Holm, and Bernt Hovey, solicited contributions toward a park and raised $3,200.00, with no contribution larger than $25.00. The following year it became a community park, and it was later turned over to Kandiyohi County and became a county park.