Oliver Kelley moved to Minnesota in 1849, the year that Minnesota Territory was formed. Although he knew little about farming, he taught himself using agricultural journals and correspondence with other "scientific-oriented" farmers. He became an expert on farming in Minnesota, and he learned how adverse events such as bad weather, debt, insect pests, and crop failures could devastate a farmer's fortunes. In 1864, he became a clerk in the United States Department of Agriculture. After the end of the American Civil War, he toured the agricultural resources of the Southern states. When he returned to Washington, he was convinced that farmers' fortunes could be improved through cooperative associations with other farmers. Along with several other associates, he founded the National Grange of the Patrons of Husbandry in 1867. He later returned to Minnesota with the hope of organizing local Granges.
The farm remained in the ownership of the Kelley family until 1901. The National Grange bought the farm in 1935 and donated it to the Minnesota Historical Society in 1961. Today, the farm offers tours by guides in period costume, who invite visitors to help out with farm chores such as picking vegetables, churning butter, and making soap. In 2003, state budget shortfalls threatened closure for the historical site. In response, the group Friends of the Kelley Farm was organized to help raise money to close the funding gap. The Friends group also supports the educational goals of the site and works for the site's preservation.