Located across the street from the Whitewater Passenger Depot, the Whitewater Hotel operated primarily as a "commercial" or "railroad" hotel, largely dependent on railroad passengers coming into Whitewater. The building was constructed in 1894 after a fire destroyed the original hotel on the site. The old hotel was small and old-fashioned, but the new Whitewater Hotel met the standards of a well-appointed and attractive commercial or railroad hotel of the time.

It was important that the Whitewater Hotel be reconstructed, as Whitewater had just lost two major industries and entered into an era when the basis of the city's economy was commercial. Not only was the Whitewater Hotel conveniently located near the passenger depot, it was near the freight depot, where Whitewater's farmers shipped out their produce. Commercial agriculture sustained Whitewater through much of the early twentieth century and the Whitewater Hotel served the public involved in this activity.

Like most small town hotels, the Whitewater Hotel declined during the Great Depression of the 1930s and World War II. In 1952, the biggest blow came—the end of passenger service in Whitewater. The hotel became a rooming house and during the later twentieth century, the building suffered from lack of maintenance, inappropriate remodeling, and a major fire. Vacant for many years, the building was slated for demolition until the city enticed a developer to renovate the building in 2006 using federal and state rehabilitation income tax credits. Saved from the wrecking ball, the old Whitewater Hotel, now an apartment building with a popular coffee house, went from eyesore to an enhancement in Whitewater's downtown.