During the 1840s, an organization, known as the “Tennessee Clonisation Gesellschaft,” was formed to encourage Swiss settlements on the Cumberland Plateau. Four settlements resulted from the effort, but it was not until 1869, when Gruetli began, that a permanent Swiss colony was established in Grundy County. Captain Eugen Plumacher, the commissioner of emigration to the United States, and Peter Staub, a Swiss emigrant living in Knoxville, purchased fifteen thousand acres of land south of Beersheba Springs in Grundy County. Advertisements extolled the climate and inexpensive arable land, and poor economic and social conditions in Europe produced many German-speaking Swiss willing to move to the United States to start a new life. Nearly one hundred Swiss families, including farmers, artisans, merchants, and professionals, had arrived in Gruetli by the late 1870s.
The deceptive promotional broadsides failed to depict Grundy County as the isolated and heavily forested region that it was. When confronted with the reality of their new home, some newcomers left, but those who remained drew up a constitution and elected officers. Among the first officers was farmer Anton Stoker, who served as treasurer. Christian Marugg, the owner of a farm implement company, returned to Switzerland and recruited others to move to Grundy County. By 1880 the Swiss population in Grundy County had reached 227, more than any other county in the state.
The Gruetli community reestablished or maintained many practices common to the Swiss culture. Land was set aside for a school and church, where both school lessons and church services were conducted in German until the early part of the twentieth century. A communal pasture and a community store were established in the 1870s.
Although isolated from much of the state, Gruetli's location on the stagecoach road from McMinnville to Chattanooga drew it into the commercial world of travel. Around 1875, Christian Marugg built an inn for travelers that included finely crafted interior woodwork similar to that found in the Stoker farmhouse.
The principal occupation of Gruetli's settlers was agriculture, primarily grain production, dairy farming, and cheese making. The Swiss farmers organized an agricultural association, or farmers' union. The Gruetli (or Swiss) Agricultural Society acted as a cooperative in the purchase of seeds and provided agricultural education for the members. The society met regularly, often in the home of Anton Stoker, until 1917. The intensive farming methods practiced by the Swiss proved valuable during a period of economic depression in the 1890s, when Gruetli farmers fared better than their Grundy County neighbors.
In addition to grain and dairy farming, Gruetli developed several other interests. Fruit trees and grapes were cultivated, and several saw mills were operated by the Swiss. In the 1910s the community of Laager developed as a result of mining operations in nearby Palmer. Situated on a branch railroad line east of Gruetli, it was first known as Henley's Switch and changed to Laager in 1920. In 1980 the community incorporated with Gruetli to become Gruetli-Laager.