Alsen was named by Olof Erickson in honor of his birthplace, Alsen Parish, Jamtland District, Sweden. Olof Erickson was an early homesteader as well as the town's first blacksmith. Alsen started when Erickson established his blacksmith shop in 1871. Erickson established the Alsen post office in 1874 and served as its first postmaster. The post office was closed in 1900.
During its early days, Alsen had a creamery, a general store, a telephone exchange, a harness shop, a blacksmith shop, and a Model T garage. The creamery closed in 1933. The garage was sold in 1938. Part of the Alsen store was remodeled into living quarters in 1948.