Father Paul Dobberstein was a German immigrant ordained in 1897.[1] He became critically ill with pneumonia and promised to build a shrine to the Virgin Mary if she interceded for him.[2][3] After his recovery, he began stockpiling rocks and precious stones.[4] Construction of the Grotto began in 1912[4][5] and continued year round for 42 years.

Father Dobberstein used the knowledge and skills gained during construction of his first grotto honoring Our Lady of Lourdes while training at St. Francis Seminary in St. Francis, Wisconsin. His method was to set fancy rocks and gems into concrete. In 1946, Father Louis Greving began helping Dobberstein with the construction.[5] The Grotto covered an area the size of a city block when Dobberstein died in 1954. Matt Szerensce helped contribute the work until his retirement in 1959.[6][7] The Grotto was maintained by Deacon Gerald Streit from 1994 until his retirement in the early 2000s.

Father Dobberstein's works inspired Mathias Wernerus (who also attended St. Francis Seminary) to build the Dickeyville Grotto in Dickeyville, Wisconsin, in 1930,[8][9][10] starting the grotto-building movement in America.[9][11]

In August 1, 2015, the Grotto was raised to the status of a diocesan shrine by R. Walker Nickless, Bishop of Sioux City, becoming the diocese's first designated religious shrine.