The grotto was built by, or at least built for, John Scott, an 18th century poet. He was born in London in 1731 and moved to Hertfordshire in 1740 to find cleaner air. John Scott inherited Amwell House and its grounds when his father died in 1768. Building grottoes was fashionable at this time so when rebuilding the house and landscaping the gardens he decided to build his own.
John Scott's daughter, Maria, inherited her father's estate when he died in 1783. When she died in 1863 the property was sold and Scotts Road built. The grotto was then part of the garden for a large house on Scotts Road but this was demolished in the mid 1960s and the present modern houses on this section of the road built. The builder planned two houses for the land that the grotto occupies and had demolished the porch and the roof of the council chamber before work was stopped. However it wasn't until 1974 that East Hertfordshire District Council acquired the land and carried out basic repairs.
In 1987 the Ware Society, a local voluntary group who had been involved with opening the Grotto to the public since 1983 suggested a full scale restoration scheme. James Howley, a specialist architect designed the scheme which involved replacing the demolished porch, re-roofing the Council Chamber and repairing the summer house. The proposed scheme cost £124,000 of which East Herts District Council contributed £60,000, English Heritage £32,000 and the remaining £32,000 raised by the Ware Society. Work started in January 1990 and the restored grotto was opened in April 1991 by Lord Montagu of Beaulieu, the chairman of English Heritage at the time.