Kodaikanal was not discovered until the early 19th century. British Lieutenant, Ward, first spotted Kodaikanal in 1821. In 1845, the first two bungalows, Sunny Side and Shelton were built by American missionaries with the help of an Englishman, Mr.Fane. Later many American and British families visited and decided to remain in the pristine hill station, as the weather reminded them of that at home. It also became a summer retreat for many European diplomats who came here primarily to escape the sweltering summer of the plains. However, it was only in the 20th century that a few elite Indians came to realise the value of this enchanting hill station and started relocating here. Amongst the current Indian locals, there are often discussions about how their ancestors trekked and climbed the mystic hills, from the villages in the foothills. It sometimes took them upto two full days to scale the steep valleys, braving attacks from wild animals and eventually reaching the summit of what is now Kodaikanal market, basically to sell their produce from the plains.

The Kodai Lake was laid out in 1863 by Sir Vere Hendry Levinge who was then the Collector of Madurai. The lake was originally stocked with fish from the local streams. In 1890, the first Boat Club was formed and today there are three different Boat Clubs with a variety of boats available on hire. Surprisingly, pictures taken in Kodaikanal during the early years of its foundation show the area around the lake with very few trees and a marshy landscape because the manmade lake had no bunds. Today, with an excellent paved path around it and strict municipal laws against construction near the lake, Kodai lake is as pristine as ever. A gallery of antique photos of Kodaikanal during its foundation are displayed in Hotel JC Residency.