The first settlers arrived in the 1820s. Residents have claimed that the name comes from "settlers (or wandering hobos, depending on whom you ask) who declared water from a creek to be 'sweet to the lips.' " It has frequently been noted on lists of unusual place names.
A 1986 profile on the community reported a population of 85, no stop signs or street lights, no post office, and that the former two-room school house was now the "Sweet Lips Grocery" store. The school closed in 1960.