In 1862, the old Åsebrekkene road was rebuilt with a side road to Åmotsdal. As a result, Nutheim then emerged as a small yet viable hub for commerce, with a posting station, a hotel and a bakery.

Gina Thommesen bought the place in 1901. She laid out a beautiful garden in the hills below the hotel. In 1917, the brothers Olav and Halvor Svartdal bought the property, and the family is still running it today.

After World War II, the artists Erlend and Terje Grøstad arrived at Nutheim. As with a lot of other artists, they fell in love with the nature and the people. They married the two sisters and heiresses of the hotel. Anne and Erlend Grøstad took over in 1957, and have over 50 years transformed the place to the way we know it today.

Nutheim Målarskule started in 1960, and three years later they relocated the old vicarage of the parish of Hjartdal to Nutheim.

Erlend Grøstad received the Borough of Seljord's Culture Price in 1992, HRH the King's Medal of Merit, as well as Telemark County's Culture Price for his work in pursuing and creating Norwegian art.

The hotel went through several renovations and in 1988-89 yet another road was constructed, this time around the hotel area. The busy road that had run through the little square outside the hotel was now gone, giving the old hotel more space and tranquillity.

Ellen Grøstad Barstad had been working with her parents for several years when she took over the running of the hotel in 2006.