The Village of Couderay was founded about 1890, twelve years before the Omaha Railroad built its Park Falls division through Sawyer County. The community was called "Couderay" because of its proximity to Lac Court Oreilles Indian Reservation and the lake bearing the same name.
Some of the logs which were cut in the Couderay area were driven down the Couderay River and into the Chippewa River and then to Chippewa Falls. Millions of board feet of lumber were shipped to market by railroad.

A lumber company called the Couderay Hardwood and Hemlock Company built a sawmill on the farmsite later owned by Martin Clements. This mill was then sold to the Bekkedahl brothers in 1912 who last sawed lumber in the village in 1925. During the period of operation of the sawmill business, a new mill was built by the Bekkedahl Lumber Company on the banks of Eddy Creek. Across the Eddy Creek was built a dam which made a small flowage used as a mill pond. Concrete pilings still remain, marking the site of the old and last sawmill in Couderay.

Couderay operates (as of 1957) an elementary school which serves the village of Couderay, the Town of Couderay, and a portion of the Court Oreilles Indian Reservation which extends into the northern part of the township.

After the logging era various interests made an attempt to promote agriculture, chiefly potato culture. This venture was successful for a few years but was discontinued in 1930. The warehouse which was used for storage of potatoes still stands (1957). It has been remodeled and now is owned and used by Edward Forrester, who owns and operates the Badger Boat Builders, a prosperous manufacturing enterprise.

Couderay is near the lake and resort region of Sawyer County and its merchants and businessmen enjoy a brisk summer business from vacationists.

Eddy Creek is considered to be a good trout stream and is visited by hundreds of fishermen each year. The Eddy Creek Pond has been acquired by the Wisconsin Conservation Department as a recreation center.

Couderay is considered a site of historical interest. Two markers and a wayside have been constructed in the Village commemorating the Tubby Forest and the Lac Court Oreilles Indians.

The Omaha Railroad continued to serve the region as of 1957, although the depot had been closed. At that time the station agent's services were transferred to Radisson, and all car billings, telegraph, express, and freight transactions were carried on from that point, which has since also been discontinued.