In June 1895 James W. Tufts, a successful Boston manufacturer, came to North Carolina seeking a healthy and mild
climate. After purchasing 5,890 acres for approximately $1.00 per acre in the Sandhills area of Moore County, Tufts hired Frederick Law Olmsted, the distinguished landscape artist who designed Central Park in New York City and the grounds of Biltmore House, to draw up plans for a village named Pinehurst. Tufts put in cottages, a power plant, a post office, a department store, and the 250-room Carolina Hotel. The huge structure, the largest frame hotel in the state, contained 49 suites with bath and a music room for 400 guests, which featured daily concerts by the hotel orchestra. The hotel opened on 1 Jan. 1901 and boasted every modern comfort and convenience, including electric lights, elevators, and telephones in each room. Tufts also built a trolley line from the Seaboard Railway station in nearby Southern Pines to transport passengers to the Carolina Hotel.In 1898 Tufts hired golf architect Donald J. Ross to build a nine-hole golf course. By 1919 Ross had designed four courses, including the famed Pinehurst Number 2 course, and golf became the essential pastime for Pinehurst's tourists. The hotel also provided tennis courts, horseback riding, polo, croquet, and trap shooting. Sharpshooter Annie Oakley ran the Pinehurst Gun Club for ten years. Guests of the Carolina Hotel included Warren G. Harding, J. Pierpont Morgan, Amelia Earhart, John D. Rockefeller Sr., Theodore Roosevelt, John Philip Sousa, and Will Rogers. From 1895 until 1920, James Tufts ran Pinehurst and the hotel as a sole proprietorship. In 1920 a charter for Pinehurst, Inc., was obtained from the state. By 1980 Pinehurst was a municipality, no longer a "company town."
In 1980 Malcolm McLean of Diamondhead Corporation purchased Pinehurst, Inc. McLean built a new front entrance and thoroughly refurbished and repaired the hotel, now known as the Pinehurst Hotel. Diamondhead defaulted on bank loans in 1982, and the Club Corporation of America bought the hotel, golf courses, and clubhouse two years later. Restored to its former splendor, the Pinehurst Resort and Country Club was in the early 2000s a AAA Four-Diamond Resort, with eight golf courses, a tennis complex, and other amenities.