In the Early 1800's settlers named Vine Grove for the wild grape vines that grew in the area. The community was established on Otter Creek in 1806. During the 1860's the small settlement moved approximately one mile to the east to be astride the Illinois Central Gulf railroad line. When Abraham Lincoln's family moved from Kentucky to Illinois, their route took them through Vine Grove, thus making the community a part of the "Lincoln Trail". Fires destroyed much of Vine Grove in 1905 and 1908 but property owners promptly rebuilt.

During the Civil War both northern and southern sympathizers lived in the community. When General John Hunt Morgan's cavalry passed through Vine Grove on its way to raid Indiana and Ohio, a local blacksmith, William Settle, repaired horseshoes for Morgan. After Morgan moved on, Settle was tied to a tree and shot by northern sympathizers.