Originally known to the First Nations of the Okanagan Valley as Khiluk, which was- and remains today revered as a sacred site producing therapeutic waters. During World War I the minerals of Spotted Lake were used in manufacturing ammunition. Later the area came under the control of the Ernest Smith Family, for a term of about 40 years. In 1979 Smith attempted to create interest in a spa at the lake. The First Nations responded with an effort to buy the lake; in October 2001 they finally struck a deal. First Nations arranged the purchase of 22 hectares of land for a total of $720,000, and contributed about 20% of the cost. The Indian Affairs Department paid the remainder.

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