Yayoi period The legendary origin of Kusatsu goes back to the second century during the Yayoi period. According to the legend, either
Yamato Takeru or
Yamabushi discovered the hot springs around Kusatsu; however, there is no historical evidence for either claim. Per legend, Yamato Takeru named
Tsumagoi and
Agatsuma after his wife ("tsuma" means "wife" in Japanese).
Kamakura period Up to the 12th century there is no specific record of Kusatsu. Local folklore recounts that
Minamoto no Yoritomo came to Kusatsu in 1193 in pursuit of fleeing
Taira clan warriors. He then bathed in the Yubatake. The on which Yoritomo sat, and the in which he is said to have bathed, still exist. Kusatsu's history began in 1200 when the temple of Kōsenji was founded.
Sengoku period Almost 400 years later, during the Sengoku period, there is more evidence for the existence of Kusatsu, which had grown into a hot-springs resort popular with wounded
samurai. The contains correspondence during the year 1595 (
Bunroku 4) between
Tokugawa Ieyasu and
Toyotomi Hideyoshi in which Hideyoshi recommended the Kusatsu hot springs to Ieyasu. The latter however, did not go to Kusatsu himself, but sent some servants to fetch some water from Kusatsu instead.
Edo period During the Edo period, especially the
Bakumatsu period, Kusatsu experienced unprecedented economic growth and became one of Japan's best-known hot springs. This was partly due to the increasing incidence of
venereal diseases like
gonorrhoea and
syphilis, contracted in Tokyo red light districts like
Yoshiwara, for which there was then no known cure besides bathing in a hot spring. The saying: also goes back to this time and means: a thousand stores, just like in (the shopping districts in)
Edo. Hearing the praise of the Kusatsu Onsen the 8th Shōgun
Tokugawa Yoshimune had hot-spring water drawn from the Yubatake source and transported into his castle for bathing. The area of present-day Kusatsu was part of the
hatamoto-administered territory within
Kōzuke Province during the
Edo period.
Meiji period In 1869, Kusatsu burned to the ground. The town was reconstructed within a few years, but the process left many local people in debt, causing the bankruptcy of many small enterprises, especially
ryokans, over the next 20 years. At that time many of the inhabitants of Kusatsu abandoned the traditional practice of , which meant leaving Kusatsu in wintertime and returning to their hometowns, located further down the mountains. Instead, the townspeople sold their old homes to repay their debts and began to live in Kusatsu all year long. Kusatsu Village was created within Agatsuma District of Gunma Prefecture in April 1889, by the merger of former Kusatsu with Maeguchi and six other hamlets, with the creation of the modern municipalities system after the
Meiji Restoration. In July 1900, the former Kusatsu and Maeguchi portions of the village was raised to town status, and the remaining portion formed Kuni village. The infrastructure developed in the Meiji period and also people's knowledge, therefore many famous people were visiting Kusatsu. Especially foreigners were scientifically interested in this area, which became an important area for research of effects of hot springs, volcanoes etc. In 1876,
Erwin Bälz, a German
internist came to Kusatsu for the first time. Bälz was one of the fathers of modern western medical science in Japan and court physician to
Emperor Meiji. He was convinced of the healing power of the hot springs in Kusatsu, and began scientific research into them with a view to convincing the townspeople of the need to teach the correct application of the hot springs to Japanese medical doctors.
Taishō to Reiwa In 1914, the Kusatsu ski club was founded. The year 1915 saw the first visit of British
Anglican missionary,
Mary Cornwall Legh. In 1916 Cornwall Legh using her own funds established the St. Barnabas' Mission, providing residential care facilities to the sizable population of
Hansen's Disease sufferers then present in the Yunosawa area of Kusatsu. Cornwall Legh devoted her remaining years to the care of the Kusatsu leprosy community, her work and dedication to this cause recognized with honors by the Japanese Government. In 1941 the St. Barnabas' Hospital was closed, replaced by the, subsequently notorious, government run
Kuryu Rakusen-en Sanatorium. St. Barnabas' Church and Cornwall Legh Park in Kusatsu attest to the charitable legacy of Mary Cornwall-Legh and the history of the community she sought to serve. In 1926, the construction of the between Kusatsu and
Karuizawa, which had been begun in 1908 was finished. In 1948, a ski lift was erected on Mount Tengu, near Kusatsu. It was the first ski lift in Japan, with Kusatsu going on to become one of the country's first proper ski resorts.
Sexual assault hoax against mayor In 2020, a local election in which over 90% of voters voted to recall town councillor Shoko Arai made international headlines. Arai, the only woman on the council, had accused mayor Nobutada Kuroiwa of sexually assaulting her. Kuroiwa denied the accusations, which triggered a backlash against Arai, who was accused of tarnishing the town's reputation with her allegations. In December 2021, Arai filed a complaint against the mayor of the town for indecent assault. The Maebashi District Public Prosecutor's Office dismissed the complaint on the grounds that the mayor was not suspected. In response, the mayor filed a complaint against Arai for the crime of filing a false complaint. In October 2022 the Maebashi District Public Prosecutor's Office indicted Arai on charges of filing a false complaint and defamation against the mayor. In December 2022, Reiji Iizuka, a writer, stopped selling e-books meant to denounce the mayor and issued a statement apologizing to him. On November 15, 2023, Arai's lawyer announced that Arai had admitted that her claim that the mayor had sexually assaulted her in the mayor's office was false, and that Arai would now claim in court that the mayor had touched her breasts and buttocks in his office. On January 22, 2024, the Maebashi District Court found that there was no sexual activity between the mayor and Arai, and sentenced the writer, Iizuka, to one year in prison, suspended for three years, for defaming the mayor. According to prosecutors, Iizuka opposed the mayor's attempts to reform Kusatsu's hot spring management and published the e-book even though he knew Arai's testimony might be false. On April 17, 2024, the Maebashi District Court ordered Arai to pay the mayor 2.75 million yen for defamation. This is a civil judgment. On 29 September 2025, Shoko Arai was found guilty for falsely accusing the Kusatsu town mayor of rape, sentenced to two years in prison, suspended for five years. Arai did not appeal and the case was closed. ==Government==