During the late nineteenth and early twentieth centuries, the Hot Springs Domain at Te Aroha was the most popular geothermal resort in New Zealand. The Domain was initially established as a reserve in 1881, incorporating an area of 9.1 hectares (20 acres) on the lower slopes of Mount Te Aroha. The many hot springs in this area lay within the traditional territory of Ngati Rahiri, a hapu of Ngati Maru of Hauraki, and had long been frequented by Maori for their perceived healing qualities. By the late 1870s the site had become a popular destination for Pakeha visitors, with tourist numbers increasing after the discovery of gold on Mount Te Aroha in 1880 and the development of Te Aroha township as a mining settlement. The Domain was acquired by the government soon after the passing of the 1881 Thermal Springs District Act, with local Maori - who had played an instrumental role in initially promoting the resort - retaining the right of free access to the waters. The 1881 Act had been introduced to promote Crown ownership of New Zealand's thermal resources, partly in response to their increasing purchase and commercial exploitation by private entrepreneurs.

The earliest permanent buildings in the Domain were erected soon after the reserve was brought under the Public Domains Act in 1882, and were overseen by the Te Aroha Hot Springs Board. By 1887, there were seven bath houses and a drinking fountain, with extensive grounds laid out to plans drawn up by Henry Crump, a local engineer and architect. Government money largely financed the development of the facilities, as well as the establishment of a railway from Auckland in 1886. As the centrepiece of the now-burgeoning town of Te Aroha, the spa became the first geothermal resort in the country to receive thousands of visitors on an annual basis. People came to bathe or ingest its waters for health reasons, but also to promenade, listen to music or play genteel forms of sport such as tennis, croquet and bowls. Spas had important associations in nineteenth-century European society as places where the well-to-do could relax and congregate in refined and beautiful surroundings.

Although the health and leisure aspects of the reserve were heavily promoted when it was taken over by the Department of Tourism and Health Resorts in 1903, the facilities went into a slow decline after government funding and visitor attention were steadily drawn to Rotorua. The Domain nevertheless remained an extremely popular destination until after the First World War (1914-1918), and continued in a reduced capacity as a spa thereafter. Following closure of many of its facilities in the 1950s and 1960s, the Domain was transferred to the control of the local council (now Matamata-Piako District Council) in 1979, while formally remaining in Crown ownership.

Begun in 1897, the former Cadman Bath House was erected as the largest building in the Domain. It was designed by C. H. Pierard, a draughtsman to the Mines Department, and cost £3000 to build. Its construction was part of a larger programme of improvements to the Domain carried out in 1897-1898, which constituted the largest single development of the spa. This work was overseen by Charles Vickerman (1855-1940), District Engineer for the Public Works Department, and was undertaken using a system of cooperative labour. Cooperative labour had been introduced as a means of providing unemployment relief by the first Liberal government, and was extended for use in the construction of public buildings by 1895. The baths were opened on Queen Victoria's birthday in May 1898 by Arthur Cadman (1847-1905), the Member for Ohinemuri and the Mines and Railways Minister, who was himself known for progressive views on work issues such as the introduction of an eight-hour working day.

The building received a steady stream of customers after it was opened and was considered to contain the best-appointed immersion baths in New Zealand. The facilities incorporated at least nineteen private bathing rooms, each with a porcelain bath provided with water up to 112 degrees Fahrenheit in temperature. The structure had separate waiting rooms for men and women, and an elegantly tiled floor. The quality of its finishings extended to the toilet areas in its eastern wing, which were fitted with decorated porcelain imported from Britain. The necessary disposal of excess water and sewage involved the construction a pipeline to the Waihou River.

The baths were used both for recreation and health reasons, with the science of Balneology gaining increasing currency at the end of the nineteenth century as a means of medical treatment. The Bath House underwent a number of renovations, reflecting medical and technological changes in subsequent years. In 1899 two of the bathrooms were altered to accommodate stretchers, rugs, pillows and head rests for the 'pack form' treatment of rheumatism. In 1906 electric lights were installed and an electric bell call service provided in 1912-1912. A massage room was built onto the rear of the building in 1923, while in 1929 X-ray apparatus was installed. The building was enlarged in 1947-1948 when an ex-army structure was attached to the east wing, accommodating a massage and X-ray room. A further extension was added to this wing in 1951 to allow the physiotherapist, Mr Leslie Bryant, more space. Both of these extensions were carefully constructed in a very similar style to the original design.

By this time patronage of the baths had begun to dwindle and they were closed in the early 1960s. From 1962-1963, major modifications occurred when the building was converted to a bowling pavilion. Most of the bath rooms were removed at this time, as well as many of the building's fittings. In 1971 the Te Aroha and District Museum took over the eastern wing of the building, and now occupies the whole structure. The Bath House holds displays on numerous aspects of local history and is open to the public.