The gorge was carved out during a series of ice ages. The last ice age is said to have created a lake in Drachenried, the outflow of which gradually wore the rock away to create the gorge as the water found its way to Lake Lucerne.
Industrialisation began in this region in 1562 with the construction of the first flour mill. Its ruins can still be seen in the gorge. Meanwhile, 1598 saw paper being manufactured in Central Switzerland for the first time, here at the foot of the Rotz Gorge.
Quarrying for limestone began in 1879. This gave rise to long underground galleries in which cheese used to be stored. They are now used by mushroom growers.