Guide Rock was named after a prominent rock bluff - Pa-Hur, which was an important landmark and guide to early trappers and Native Americans (Pawnee). The bluff is situated on the southeast end of town. Guide Rock was settled in 1870. The Rankin party was the first settlers to arrive. They had planned to continue further west but instead chose to settle in Guide Rock and erect a stockade. The Guide Rock Post Office was established that same year, and A.M. Talbot was the very first Postmaster.
The railroad was built through Guide Rock in 1881-1882, and the main street was moved to accommodate the depot. Immigration from the East and overseas increased with settlers coming west on the trains. Over the decades, Guide Rock continued to grow and prosper. Early enterprises included Portwoods Groceries, the Hi-Way Cafe, and Ely's Grains, Feeds, and Seeds. The 1950 Diversion Dam erected 2.5 miles west of Guide Rock improved irrigation and water control for the river valley, which expanded agricultural activity in the region.