Gruetli was founded by German-speaking Swiss immigrants in 1869. The town was part of a greater initiative - conducted by an organization known as the Tennessee Clonisation Gesellschaft - to establish Swiss colonies atop the Cumberland Plateau in Tennessee. Gruetli was probably named after a commune in the Swiss canton of Glarus. Peter Staub, a member of Knoxville's thriving Swiss community, helped purchase the initial tract of land for Gruetli. The land was advertised in Switzerland, where the opportunity for a new start appealed to many families struggling with difficult economic conditions in Europe.

Although over 100 Swiss families moved to the Gruetli area in the 1870s, many were disappointed by the land's poor quality and relative isolation, and thus relocated to nearby cities. Nevertheless, by 1880, Grundy County had the largest Swiss population of any county in Tennessee. Prominent early settlers at Gruetli included Christian Marugg, who operated an inn along the stagecoach road between Chattanooga and McMinnville, and Melchior Thoni, Jr. (1849-1926), a woodcarver whose work was displayed in the old Governor's Mansion and the Christ Church in Nashville.

Throughout the early 1900s, railroads were constructed in the hills east of Gruetli to accommodate various coal mining operations in the area. Laager was established as a railroad stopover (initially known as Henley's Switch) in 1918. Gruetli and Laager merged and incorporated in 1980.

Information from www.wikipedia.org