Alma developed on a narrow strip of land between the Mississippi River and 500-foot limestone bluffs. The first permanent settlers to reach Alma arrived in 1848. Most were wheat farmers, and before long, Alma was a major wheat market. About this same time, a few local businessmen recognized the potential in logging of the Beef Slough, a slow channel of the nearby Chippewa River. This channel was ideal for pulling logs out of the water after being floated down the river.

Alma soon became a major distribution point for lumber cut in northern Wisconsin. From 1867 to 1889, five billion board feet of timber were pulled out of the Beef Slough by as many as 600 men who worked at nine camps along the river run by Alma logging companies. This logging industry brought prosperity and growth to the little river community. During the 1880s, Alma grew with dozens of new homes and businesses. Many of these were fairly simple buildings, but some of the wealthier business owners and lumbermen built houses and offices in the Queen Anne, Romanesque, and Italianate styles as well.

Unfortunately, the logging boom in Alma ended by 1890, halting its growth. As a result, much of downtown Alma looks very much as it would have in the town's heyday in the 1880s.

A new lock and dam built on the Mississippi River in 1935 helped to revitalize the town as well as Alma's relationship with the river, something that had been such an important part of its past.