Situated along the north shore of the eastern part of the lake by that name, Walloon Lake, Michigan. is in the northwestern part of Melrose Township in north Charlevoix County, in the northwestern portion of the Lower Peninsula.

Walloon Lake is an unincorporated community, and, in Michigan, unincorporated communities are without legally defined boundaries. However, Walloon Lake is also a census-designated place (CDP), which has defined boundaries for the purpose of the U.S. Census.

Its northern boundaries are made up of North Shore Drive and Country Club Road, while US Highway 131 forms its eastern boundary, the Bear River forms its southern boundary, and Walloon Lake forms its western boundary.

The chief routes through the community include US-131, M-75, Springvale Road, and North Shore Drive. Cities and villages within twenty-five miles of Walloon Lake include Boyne City, Boyne Falls, Petoskey, Harbor Springs, East Jordan, Alanson, Wolverine, Vanderbilt, Charlevoix, and Ellsworth, while the unincorporated communities of Clarion, Bay View, and Horton Bay are within ten miles.

The lake for which the community is named is a 4,270-acre glacier-formed body of water in Charlevoix and Emmet counties. The Bear River drains from the east end of the lake in the village of Walloon Lake, emptying into Lake Michigan in Petoskey.

In 1872, John Jones, Jr. and his sons, Clarence and Elliot, took homesteads in the area and became the first European-American settlers here. They cut ties for the Grand Rapids & Indiana Railroad, which came through in 1874. The railroad established a station named Melrose, for Mel Rose, an early surveyor.

The township was also named Melrose, but early townspeople applied for a post office named Bear Lake. As there was another post office in Michigan by that name, the post office was established as Tolcott on October 19, 1897, with Frank Jones as postmaster. The post office was renamed Talcott on March 4, 1899, and became Walloon Lake on September 22, 1900. Reportedly, this name was suggested by J.R. Haas, a local butcher, who had seen the name on an old railroad map. It was later learned that a group of Walloons, from Belgium, had settled at the north end of the lake (then known as Bear Lake), but no trace of their settlement remained.

By the late 1800s, as the lumber industry declined, Walloon Lake began a transition into a resort area. Extended to the area for the purpose of supplying the lumber industry, and transporting its products, the railroads began to consider new uses for their trains, and one of them was to build hotels and resorts in areas that were primarily accessible by rail.

In 1891, the Grand Rapids & Indiana Railroad built a new extension that went to Walloon Lake, attracting passengers from across the state and elsewhere in the Midwest, and some of them stayed to build cottages along the lake.

In 1899, a couple by the name of Clarence and Grace Hemingway came to Walloon Lake and built a summer cottage that they called Windemere. That year, they gave birth to a son, whom they named Ernest. Ernest Hemingway spent much of his youth along Walloon Lake, which would later inspire his Nick Adams stories. This cottage remains and is owned by a Hemingway relative. Although designated as a National Historic Landmark in 1968, it is not available for public tours.

As tourism grew, the number of homes and cottages in the area rose. By 1903, there were a few hotels, a bathhouse, a boat livery, and an ice cream manufacturer. Soon afterward, the settlement was also home to a boat builder, a yacht club, and some more hotels. An electric light plant and a telephone company were built in the early 1920s.

In the first few decades of the 20th century, the railroad tracks were replaced by roads as the most convenient way to get to the lake and village.

However, in the second half of the 20th century, as an improved road system and greater availability of private automobiles made other places easy to get to as well, Walloon Lake began to decline. Some of its businesses closed, while others were destroyed by fire. At one point, all that was left was a hotel, a general store, a post office, and some marina buildings.

A plan to build lakefront condos failed when residents objected because it would block their views of the lake. In 2012, another plan to turn some of the lands originally intended for condos into a lakefront park was agreed to, and this helped bring new hotels and some smaller businesses to Walloon Lake. Today, Township Park takes up a large portion of the southern part of the CDP, between M-75 and US-131.

Today, the small community has a population of about 270 in the CDP, which increases during the summer months. Besides the lake, the Bear River flows on the south side of town, and there is also a river trail.

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