The area now encompassed by Bella Vista was used by roving bands of Osage and Delaware who used the area for seasonal hunting grounds. A prominent rock shelter known as Hay Bluff along US 71 was used by various groups in the area and remains an important archaeological site, before later being used by early settlers to store hay. The area was established as a primitive summer resort in 1909 by a Bentonville minister who envisioned golf, tennis, and inexpensive lots for summer cabins. In 1915, Lake Bella Vista was created by damming Little Sugar Creek. By 1916, the resort was sold to the Linebarger Brothers Realty Company, who further developed the resort to include more amenities, including the Sunset Hotel and Wonderland Cave nightclub. Early cabins recognized on the National Register of Historic Places include Blackwell-Paisley Cabin, Bogan Cabin, Hagler-Cole Cabin, Lamberton Cabin, Pharr Cabin, Princedom Cabin, and Sutherlin Cabin. The resort began catering to city dwellers with automobiles and came to include "colonies" of residents from Dallas, Texas and Tulsa, Oklahoma.
Bella Vista became a retirement community in 1965, and, after much contention and a 2006 vote of its property owners, became an incorporated city. Following its official incorporation on January 1, 2007, the new city government took over the police department, fire department, streets, trash removal and other city functions, while the Property Owners Association (POA) retained control of the many amenities available to members (property owners) and their guests.