Walters Falls was founded in the 1852 when John Walter of Toronto took up 300 acres of wild land on the south branch of the Bighead River. Walter set up a sawmill in 1853.

The area surrounding the inn features a river, a dam, a large waterfall and a forest with outcroppings of the Niagara Escarpment. The area is maintained in a picturesque condition and is considered a local tourist attraction. The waterfall is just one of many in Grey County.

Surrounded by rolling farmland and bush, Walters Falls also sees the Bruce Trail running along the Bighead River.