This 47 acre island is well steeped in history. James Ames, Jr. purchased the island in 1824 as it lay off of his mainland farm. In 1861 the Diamond Island House was built, a summer hotel with a restaurant and a bowling alley. The Lady of the Lake and the Mount Washington both made regular stops at the island as a service to the lodgers. In 1865 the hotel was purchased by the Winnipisseogee Lake Steamboat Company. The Hotel became known as a house of ill repute, with gambling, rum drinking and other behaviors not suitable to mention! In 1870, the Hotel was dismantled and drawn by oxen across the ice to be rebuilt in Weirs as a section of the Hotel Weirs. This hotel burned in 1924 and so a part of Diamond Island history has been lost forever.
In 1934 F. Carroll Spooner bought the now deserted island for the sum of $5000. The Spooners built a log cabin on the northwest corner of the island, a simple home with a stone fireplace in the center and a commanding view from the front porch. Mr. Spooner was a M.I.T. graduate and in an effort to pay taxes he leased a portion of the island to M.I.T. and the U.S. Navy to conduct experiments for camouflaging submarines in 1947. The Navy also conducted underwater laser beam testing and to this day the tracks used in these experiments still lay in the water off of Diamond Island.
The island is currently home to several summer cottages but in keeping with its history there is no electricity on the island and this is the way the residents want to keep it.