The first Americans came from Maryland and Virginia in 1781. They settled at Bellefontaine, which was a name given by the French, to a spring located there. The county seat was moved from Harrisonville, near Valmeyer on the banks of the Mississippi River, to Waterloo in 1825. Waterloo plays host to a number of attractions, including the Monroe County Fair the last week of July. The community has a sister city partnership with Porta Westfalica, Germany and hosts a Porta Westfalica Fest in June in honor of the partnership.
German visitors are often present for the festival at the courthouse square.
Municipal band concerts are held every Tuesday, June through August at the courthouse square. Waterloo has all the amenities of a modern city of its size and operates its own water treatment and municipal power plants. The enactment of zoning in 1972, is considered a benchmark in the city's current direction. The city's historic Morrison Talbott Library was recently enlarged and modernized. Waterloo is surrounded by rich farmland, making agriculture a key component of the area's economy.