In 1871, the Baraboo Air Line Railroad teamed up with the Chicago/North Western Railroad to negotiate where the railroad line should go from Madison to the Mississippi River. Several Waunakee area landowners, George Fish, Lewis Baker, Ira Bacon and Solomon Martin, donated two miles of their right-a-way and $1,500 to the railroad company to build the station and allow the railroad to come through Waunakee.
The first depot quickly became the focus of a thriving agricultural economy. Farm products such as livestock, cream, tobacco and grains were shipped from the depot. In 1892 a fire destroyed the depot but a new one was built in 1896 and that building remains in Waunakee today. The depot is on the national register of historic places and is home to the Chamber of Commerce.