Crystal Cave was discovered in 1881 by William and George Vanesse. One day, these two boys were chasing a squirrel. The squirrel ducked into a hole and when the boys peered into it they noticed that they could not see the bottom. The boys dropped a stick into the hole and noticed it took a long time to hit the ground. They came back later with a lantern to discover that in the hole was a cave. They entered the cave and found two levels. The boys played in the first two levels, unaware of the third level that existed below but was covered by mud deposited from melting glaciers. In 1941, level three was discovered by the clearing of the mud.

In 1942, Crystal Cave was opened to the public. The entrance to the cave had a full service restaurant that could hold 200 people at one time and on the weekends it served over 1000 people in a day. The entrance of the cave was closed off by a glass perimeter due to the table cloths turning moldy from the high humidity that the cave produced. In the 1950's, people realized that parts of the cave would make an excellent fallout shelter so they filled it with food and other necessities. In 1957, a new section was discovered by using a Brunson and radio receiver on the surface.

In 1982, a sink hole appeared where part of the ceiling in a room called the cathedral room had collapsed. Over the years the previous owners of the cave had removed the ceiling to make the cathedral room larger and, eventually, the ceiling was unable to support itself. Blaze and Jean Cunningham, two cave geologists, purchased Crystal Cave in 1985. Since then they have discovered approximately 1000 new passages and have kept the cave in good condition.