The city is named for a nearby 60-acre (243,000 m²) island. At one time, the island was surrounded by sloughs and covered with many huge, beautiful trees, which were a refuge for thousands of birds. After the installation of ditches and tile the area was converted to farmland, erasing the town's namesake.
WTCN (now KARE 11 TV) weather forecaster, Barry ZeVann, (Minneapolis NBC affiliate) often listed the temperature in Bird Island during his weather forecasts in the 1970s.
There were 499 households out of which 28.5% had children under the age of 18 living with them, 52.5% were married couples living together, 5.4% had a female householder with no husband present, and 39.1% were non-families. 35.5% of all households were made up of individuals and 19.6% had someone living alone who was 65 years of age or older. The average household size was 2.31 and the average family size was 3.03.
In the city the population was spread out with 24.6% under the age of 18, 5.9% from 18 to 24, 25.1% from 25 to 44, 20.4% from 45 to 64, and 23.9% who were 65 years of age or older. The median age was 42 years. For every 100 females there were 101.9 males. For every 100 females age 18 and over, there were 95.0 males.
The median income for a household in the city was $38,092, and the median income for a family was $48,750. Males had a median income of $31,063 versus $23,056 for females. The per capita income for the city was $18,700. About 4.8% of families and 8.1% of the population were below the poverty line, including 6.7% of those under age 18 and 12.5% of those age 65 or over.