Ta Oyate Duta (His Red Nation, also called Little Crow), leader of the Dakota during the US-Dakota War of 1862, is killed while picking berries with his son in Meeker County, near Hutchinson. He is shot by Nathan and Chauncey Lamson, settler-colonists who are unaware of his identity. The Lamsons collect a bounty of $500 from the State of Minnesota for the murder.

Workers begin dismantling the Duluth and Northeastern Railroad, the last logging line to operate in Minnesota.

Residents of Hibbing begin moving its buildings so that the iron ore deposit located beneath the town can be mined.

A forest fire kills 413 people and burns 160,000 acres of timberland around Hinckley. Railroad engineer James Root saves more than 100 people by loading them onto train cars and driving through the blaze. The devastation of this fire convinces many of the importance of forest conservation.

Wendelin Grimm moves to Carver County. Grimm begins experimenting with what he called Ewiger Klee, or "everlasting clover," in the next year, developing a winter-hardy strain of alfalfa. Fed to cows, this alfalfa would be critical to the dairy boom in the Upper Midwest.

Cass and Chisago Counties are created. Cass is named for Lewis Cass, governor of Michigan Territory, who explored the upper Mississippi in 1820 and negotiated several treaties with Native American nations. Chisago is named using a contracted, incorrect version of the Ojibwe name for Lake Chisago: Gichi-zaaga'igan, meaning "large and lovely lake."

Doctors Floyd Lewis and C. Walton Lillehei perform the first hypothermic open-heart surgery, at the University Hospital in Minneapolis. During the procedure, the patient, a five-year-old girl, has her body temperature lowered to 79 degrees. She recovers, leaving the hospital eleven days later.

Eleven hundred Ku Klux Klan members from all over the Midwest and 13,000 spectators pack the Fairmont fairgrounds in a massive rally to initiate 400 Minnesota candidates as members of the KKK.

The Anti-Monopoly Party, headed by Ignatius Donnelly, is established during a state convention at Owatonna. The party opposes protective tariffs, monopolies of wood and coal, and extravagant corporate salaries. The Democratic and Republican Parties absorbed the anti-monopolist platform, and the party itself survived only one election.

Oliver H. Kelley organizes Minnesota's first permanent grange, the North Star Grange of St. Paul. Kelley had helped found the National Grange—a political movement and social organization for farmers—in Washington, DC, the year before. Kelley's farm is now a historic site operated by the Minnesota Historical Society.