In the late 1940s Sheena Govan emerged as an informal spiritual teacher to a small circle that included her then-husband, Peter Caddy, and Dorothy Maclean. Eileen Caddy, as she became, who had a background in the Moral Rearmament movement, joined them in the early 1950s. The group's principal focus was dedication to the 'Christ Within' and following God's guidance. In 1957 Peter and Eileen Caddy were appointed to manage the Cluny Hill Hotel near Forres, Maclean joining them as the hotel's secretary. Though now separated from Sheena Govan, whose relationship with Eileen Caddy had deteriorated, they continued with the practices she taught.
In late 1962, following concerns by the hotel's owners over adverse publicity, Caddy's employment was terminated. He and Eileen settled in a caravan near the village of Findhorn; in early 1963 an annexe was built so that Dorothy Maclean could live close to the Caddy family. Eileen Caddy's direct relationship with God, began with an experience in Glastonbury where she heard a voice say "Be Still and Know that I am God". Peter Caddy followed "an intuitive spontaneous inner knowing" and had many other influences from theosophy to the moral re-armament movement from which he developed methods of positive thinking and other methods he had learned in the Rosicrucian Order Crotona Fellowship. Dorothy Maclean initially followed practices from the Sufi group centered on the teachings of Hazrat Inayat Khan and from this developed her contact with the divine to focus upon communication with 'nature spirits' which she named as devas. Peter told her that these contacts should be made useful for the growing of food which was supplementing their income (the family at this point being entirely supported by Family Allowance). The Caddy's credited the garden's success of producing "exceptionally large vegetables" – on these practices. More conventional explanations have been suggested by locals from outside the community who feel that the garden's successes can be explained by the unique microclimate of Moray or the substantial amounts of horse manure donated by a local farmer.
There were many other people who were involved with varying importance and different influences in the early years, from Lena Lamont, part of Sheena Govan's circle, who lived in her caravan with her family and who shunned publicity to those whom Peter Caddy met as he traveled in British New Age circles: R.Oglivie Crombie (ROC); Sir George Trevelyan who formed the Wrekin Trust; Anthony Walter Dayrell Brooke, Liebie Pugh, Joan Hartnell-Beavis of Universal Link and many others. From connections such as these, the distribution of Eileen Caddy's writings to a New Age mailing list in the form of a booklet titled God Spoke to Me and the death of Liebie Pugh in 1968 people came to live on the Caravan Park eventually forming the 'Findhorn Trust' and the nascent shape to the 'Findhorn Community'.
From 1969, following Eileen's guidance, Peter Caddy slowly devolved his day to day command. David Spangler became co-director of Education almost immediately after he arrived in 1970 which resulted in the gradual transformation into a centre of residential spiritual education with a permanent staff of over 100 and the setting up of the Findhorn Foundation in 1972. In 1973 David Spangler and Dorothy MacLean with several other FF members formed the Lorian Association and left the Foundation settling near Seattle, USA. By 1979 Peter and Eileen's marriage had disintegrated and he left the Foundation. Eileen Caddy remained, and in 2004 was awarded the MBE by Queen Elizabeth II. Peter Caddy died in a car crash in Germany on 18 February 1994. Eileen Caddy died at home on 13 December 2006. Dorothy Maclean continued to give talks and workshops worldwide, visiting Findhorn regularly, and in August 2009 returned to Findhorn to live.
There are now a wide variety of courses and conferences on offer and this remains the Findhorn Foundation’s core activity. The Findhorn Foundation College was established in 2001. The Universal Hall, Findhorn's theatre and concert hall, was built between the years 1974 and 1984. The musical group The Waterboys, who have performed a number of concerts in it, named their album Universal Hall after the structure.