Kanuga had its beginning in 1909 as "The Kanuga Lake Club", a development project of Charlotte, NC developer, publisher and financier George Stephens. The goal was to provide a cool mountain retreat for families in Charlotte and the South Carolina lowlands to escape the summer heat. Stephens started with a 950 acre tract of land and commissioned nationally acclaimed landscape architect John Nolen to plan his development, which included a lake of some 90 acres, a large Inn with dining rooms and thirty-nine cottages which, having been refurbished, remain today as one of Kanuga's treasured assets. In the early days, guests came by railway to Hendersonville and were conveyed by horse drawn carriage to Kanuga.

The name "Kanuga" was chosen by George Stevens because there was reputed to have been a Cherokee community near the place in olden times. Kanuga is the Cherokee name for a scratching tool used in an ancient Cherokee ritual game similar to stickball. It was also the place name of a Cherokee settlement on the Keewee River which was destroyed in 1761. It has become a name fraught with great meaning for many who have been inspired and enriched by their experience there.

In 1928, The Kanuga Lake Club was acquired by a non-profit corporation affiliated with the Episcopal Dioceses of North Carolina and Upper South Carolina and became Kanuga Conference Center. Through subsequent acquisitions, the property increased to comprise its current 1400 acres; however, due to the great flood which broke the original dam in 1916, the lake was reduced in size to its current beautiful 30 acres. In 1968 the Kanuga Inn opened on Lake Kanuga, and in 1995 the property was designated the Kanuga Lake Historic District and placed on The National Register of Historic Places.