Rosebud sits in a sheltered river valley on the Rosebud River near the edge of the Canadian Badlands. This area was called Akokiniskway by the Blackfoot people, which translates roughly to "by the river of many roses".
The beauty of the valley has attracted many people throughout the years, from nature lovers to artists. Notable artists A. Y. Jackson and H. G. Glyde, members of the Group of Seven, spent a summer in 1944 painting in the area.
Over the years, farming and coal mining have been the primary industries. In 1972 the Severn Creek School was shut down as part of an Alberta wide education consolidating process and local children were bused to Standard and Drumheller. This resulted in many of the local businesses being closed and the hamlet population dropped to under a dozen people. However, the farming community of around 400 still supported three elevators and a seed cleaning plant.
Easter 1973, a group of young adults from Calgary brought about 40 teenagers out and camped in the now empty mercantile. This pilot event evolved into a summer camp initially funded by a grant from the Alberta government and then supported as Rosebud Camp of the Arts by Crescent Heights Baptist Church in Calgary. In 1977 a high school was founded using the old buildings of the town as classrooms and emphasizing practical, visual, music and the performing arts in its curriculum. In the 1980s, Rosebud School of the Arts began to run theatre, which eventually developed into Rosebud Theatre and the school shifted its emphasis to post-secondary education.
The current population is about 80 permanent residents with about 300 residents in the surrounding area. With the influx of students at Rosebud School of the Arts, the population changes throughout the year with a high of about 115.