In 1886, the Denver & Rio Grande Western Railroad built a resort called Lake Park on the shores of the Great Salt Lake. It was one of several resorts built along the lake throughout the late 1800s. In the following years, however, the lake level receded drastically until Lake Park was far from the lake, and the park closed by the end of the 1895 season.

Simon Bamberger, who was building his Salt Lake & Ogden Railroad line from Salt Lake City to Ogden, Utah, was vice president of Lake Park. To increase passenger traffic on his line, he bought most of the original Lake Park buildings from the D&RGW and moved them about 3 miles (5 km) east near Farmington, Utah. The resort was named Lagoon for the small body of water located on the original forty acres (162,000 m2) of the park. The original lagoon was enlarged to 9 acres (36,000 m2) by clearing some swampland.

Lagoon opened in Farmington on July 12, 1896, and featured live music and restaurants. In 1900, guests began swimming and rowing boats in Lagoon Lake. Over time, rides were added, such as the authentic Herschell–Spillman carousel and Cagney miniature railroad. In 1901, the park hosted a minor league baseball team in the Inter-Mountain League and in 1902, a team in the Utah State League.

Lagoon's wooden coaster, Roller Coaster, was designed by John Miller and constructed in 1921. Its highest height is 57 feet (17 m), and it has 2,500 feet (760 m) of track. The ride lasts just under two minutes, and reaches speeds up to 45 mph (72 km/h).

In 1927, a 1.5×10^6 US gal (5.7×10^6 L) swimming pool was built north of Lagoon Lake. It was one of the first filtered swimming pools in western North America, and was a cleaner alternative than swimming in the briny Great Salt Lake.

Lagoon's popularity grew during the 1920s and 1930s. The park's first Fun House was built in 1929, along with many other midway shows, rides, and games. During the "Big Band" era, many notable musicians played on Lagoon's stage, including Artie Shaw, Benny Goodman, Duke Ellington, Count Basie, and Glenn Miller.

The park was closed for three seasons during World War II. By 1946, the park was in bad condition and on the brink of permanent closure. The Bamberger family considered razing it. However, Ranch S. Kimball and Robert E. Freed convinced the Bamberger family to lease the park to their newly formed Utah Amusement Corporation. Kimball served as president while Freed served as secretary and assistant manager. The Freed family's Lagoon Corporation later bought the resort outright from the Bamberger family in 1983.

When the Utah Amusement Corporation took over the lease of Lagoon, a Farmington town ordinance prohibited African-Americans from using the swimming pool and the ballroom. By the end of the 1940s, Robert Freed had fully opened Lagoon to the black community, and further extended this policy to the Terrace Ballroom (formerly the Rainbow Gardens) in Salt Lake City.

The Freed family made several improvements, including an overhaul of the swimming pool in 1949, a rebuilt fun house, the introduction of the "Dodgem Cars" and the "Lakeshore Express" miniature railway in 1951, and a new Ferris wheel in 1953.

In November 1953, a fire damaged much of the park, including the fun house, dance pavilion, and the front portion of the Roller Coaster. The Roller Coaster was rebuilt and reopened for the 1954 season. Many rides were restored, rebuilt, or replaced, and a few new rides were added in 1955. In 1956, Mother Gooseland, Lagoon's first themed section, was opened between the Midway and the swimming pool. It featured rides only for children.

From the mid-1950s into the 1960s, Lagoon made many improvements. A showboat was added to the lake, and a new fun house was built, which featured such attractions as a multi-lane giant slide, mazes, mirrors, obstacle courses, and mystery rooms. There was also a mini-car ride added in 1960, followed by the "Space Scrambler", spook house, I.Q. Zoo, and shooting gallery in 1961. A Wild Mouse coaster opened in 1965.

On the Midway, musicians including the Beach Boys, the Rolling Stones, the Kingston Trio, and Johnny Cash performed on the bandstand throughout the 1960s. The Beach Boys made mention of the park in the song "Salt Lake City" on their 1965 album Summer Days (And Summer Nights!!).

The 2 ft (610 mm) narrow-gauge Animaland Train began circling Lagoon Lake in 1967. In 1975, authentic steam locomotives built by Crown Metal Products were put into operation around the lake instead, and the railway's name was changed to the Wild Kingdom Train Zoo.

The Opera House Square opened in 1968 and showcased melodramas, musicals, and silent movies. In 1976, Lagoon expanded east by purchasing Pioneer Village, an old west town complete with several historic structures. The buildings were moved to Lagoon and the 2 ft (610 mm) narrow-gauge "Pioneer Village Railroad" (featuring "Old Ironsides", a Crown Metal Products locomotive) circled the town. In addition, the "Lagoon Miniature Railroad" looped around the residential area of Pioneer Village using an original miniature gauge steam locomotive acquired in the early 1900s. A log flume ride was brought in from the defunct Pixieland Park in Oregon.

In 1976, the Jet Star 2 roller coaster was added. Before Lagoon purchased it, it was an attraction at Spokane, Washington's Expo '74.

Colossus the Fire Dragon came to Lagoon in 1983. It was selected by People magazine in 1984 as one of the top 10 coasters in the country. Colossus was Lagoon's first coaster to feature inversions, with a top speed of 55 mph (89 km/h). With its double inverted loops, Colossus had the most inversions of any coaster at Lagoon for 32 years until the opening of Cannibal in 2015.

In the late 1980s, both the old fun house and the "Haunted Shack", a walk-through dark attraction, were closed due to escalating maintenance costs and safety concerns. The swimming pool closed after its fifth decade in 1987. This made way for the $5.5 million Lagoon-A-Beach water park, which was completed in 1989. Its construction required the closure of miniature railroad operations in Pioneer Village, as some of the supports stood in the way of the track.

In 1997, in a major expansion of Pioneer Village, Lagoon added Rattlesnake Rapids, a river rapids ride located in the new Rattlesnake Plaza. In 1998, Lagoon added the Maurer AG Wild Mouse coaster. This ride replaced the wooden Wild Mouse coaster that had been demolished 5 years prior. In 1999, Lagoon opened its first attraction above the height of 200-foot (61 m): The Rocket, an S&S space shot tower with two different ride towers. In 2000, Samurai, a Mondial Top Scan, was built, as well as Double Thunder Raceway. In 2001, a Mondial Top Spin called Cliffhanger was opened. In 2002, Lagoon expanded its X-Venture Zone by adding Catapult, a reverse bungee ride. Spider, a Maurer AG steel spinning coaster, opened in 2003. In 2004, Lagoon revamped Kiddieland, giving it a garden theme and adding two new rides, Kontiki and Dragon Fly. In 2005, The Bat, an inverted coaster manufactured by Vekoma, was constructed near Lagoon-A-Beach. It is a family-friendly coaster with a minimum height requirement of 42 inches. In 2006, Lagoon expanded Kiddieland further by adding two new rides, Dinosaur Drop and Lady Bug Bop, both of which are Zierer Family Drop Towers.

On June 1, 2007, a $10 million roller coaster named Wicked opened. Wicked is a Zierer tower launch coaster, and is powered by linear synchronous motors that launch riders up a 100-foot (30 m) tower at 55 mph (89 km/h) in 2.5 seconds. It has several elements, including an Immelmann turn, a heartline roll, two half-pipe turns, and the signature "lake turn" into a final tunnel before returning to the station. Several improvements were made to the park in 2007 as well. On April 5, 2008, Lagoon opened OdySea, a Zierer "Flying Fish" ride with aquatic theming. OdySea is an interactive ride with a joystick to control the vehicle's height. Arrows blink to direct the rider to dodge jets of water from the sea creatures that attempt to soak the rider as accompanying audio tells a story. On April 4, 2009, Lagoon opened "Jumping Dragon", a Zierer "Dragon Roundabout" ride.

In 2010, Lagoon revamped its Ferris wheel, Sky Scraper. It was dismantled after the 2009 season, and reopened with a new coat of paint in April 2010. As a result of the economic crisis, Lagoon did not install a new ride that season. Instead, the park improved its entertainment division with several new shows. In 2011, Lagoon installed another family roller coaster, named BomBora. The coaster was created by a group of manufacturers and Lagoon itself, and has a height of 45 feet (14 m), as well as a theme based on 1960s surfing. In 2012, Lagoon installed a ride called Air Race. In 2013, Lagoon began work on a new coaster at the site of the former Top Eliminator. Two new family rides opened for the 2013 season, Tipsey Tea Cups and Red Rock Rally, both of which were manufactured by Zamperla. In 2014, Lagoon continued work on a new coaster, building vertically throughout the entire operating season. With much of its focus on the new coaster, no new rides were added this year. Due to maintenance problems, Lagoon-A-Beach's old Rip-Curl slide was replaced with a new slide of the same name. At a press conference on September 4, 2014, Lagoon officially announced Cannibal, a new roller coaster for the 2015 season. On July 2, 2015, Cannibal opened, featuring a 208-foot (63 m) elevator lift hill, a 116° beyond vertical drop, three inversions, and a top speed of 70 mph.

Shortly after Cannibal's opening, the park began the early planning stages of Primordial. In 2016, Lagoon did not add any attractions. However, extensive work was done on Spider. In 2017, a mural by Sril Art was created at the park. Two new rides were added to Kiddieland: Flying Tigers and Ruka Safari. In 2018, the Roller Coaster was re-tracked. A new ride opened in Kiddieland called Engine 86 in 2020. On December 18, 2021, a fire broke out at the Carousel Candy shop. The fire rekindled that evening and subsequently destroyed the candy shop and the adjacent Scamper, a miniature bumper cars ride. In 2023, Lagoon opened Primordial, a 4D interactive dark ride roller coaster, after eight years of development and construction. The attraction is located inside an artificial mountain and includes multiple ride endings. In late 2024, construction fences were put in place on the site of the former Log Flume attraction, featuring a banner for a new themed area entitled The District, which is slated to open in 2025. In November 2024, Lagoon announced that The District would include three new rides when it opened. One of these rides was announced on November 21st in a social media post as SteamWorx, an ART Wild Swing. This was followed by a second announcement on November 26th of a Zamperla NebulaZ titled Time Tinker. On January 3, 2025, Lagoon announced that the third ride would be a "reimagining" of an existing ride, with the former Helicopters attraction being rethemed as Rivets and Rotors. Cliffhanger was also removed.

In March 2025 the park announced it would be phasing out its zoo by the end of the year. The stated reason was to free up space for future expansion. The zoo's big cats were moved to the Wild Animal Sanctuary in Keenesburg, Colorado