The NPS constructed this fire lookout in 1939 (with help from the C.C.C.). Wildfire was a significant motivator for building trails and lookouts in Yellowstone. In 1910, huge fires burned more than 5 million acres across the west, killing 85 people, mostly in western Montana and Idaho. Thereafter, the Park Service and Forest Service began building “fire lanes,” many of which are hiking trails today.

Yellowstone constructed 3 primary fire lookouts on Mount Washburn (in 1921), Mount Sheridan (1926), and Mount Holmes (1931). The Observation Peak fire lookout station was a "secondary lookout" built to see a "blind areas" not seen from the primary lookouts. Other secondary looks include Bunsen Peak, Pelican Cone, and Purple Mountain.