According to Susan Fenimore Cooper, the author's eldest daughter, Cooper first conceived the idea for the book while visiting the Adirondack Mountains in 1825 with a party of English gentlemen. The party passed through the Catskills, an area with which Cooper was already familiar, and about which he had written in his first novel featuring Natty: The Pioneers. They passed on to Lake George and Glens Falls.
Impressed with the caves behind the falls, one member of the party suggested that "here was the very scene for a romance." Susan Cooper says that Edward Smith-Stanley, 14th Earl of Derby, made this remark. Cooper promised Stanley "that a book should actually be written, in which these caves should have a place; the, idea of a romance essentially Indian in character then first suggesting itself to his mind."
Cooper began work on the novel immediately. He and his family stayed for the summer in a cottage belonging to a friend, situated on the Long Island shore of the Sound, opposite Blackwell's Island, not far from Hallett's Cove (the area is now part of Astoria). He wrote quickly and completed the novel in the space of three or four months. He suffered a serious illness thought to have been brought on by sunstroke and, at one point, he dictated the outline of the fight between Magua and Chingachgook (12th chapter), to his wife, who thought that he was delirious.
In the novel, Hawkeye refers to Lake George as the Horican. Cooper felt that Lake George was too plain, while the French name, Le Lac du St. Sacrament, was "too complicated". Horican he found on an old map of the area; it was a French transliteration of a native group who had once lived in the area.
Cooper grew up in Cooperstown, New York, the frontier town founded by his father. His daughter said that as a young man he had few opportunities to meet and talk with Native Americans: "occasionally some small party of the Oneidas, or other representatives of the Five Nations, had crossed his path in the valley of the Susquehanna River, or on the shores of Lake Ontario, where he served when a midshipman in the navy." He read what sources were available at the time—Heckewelder, Charlevoix, William Penn, Smith, Elliot, Colden, Lang, Lewis and Clark, and Mackenzie.
By using the name Uncas for one of his characters, he seemed to confuse the two regional tribes: the Mohegan of Connecticut, of which Uncas had been a well-known sachem, and the Mahican of upstate New York. The popularity of Cooper's book helped spread the confusion.
In the period when Cooper was writing, deputations from the Western tribes frequently traveled through the region along the Mohawk River, on their way to New York or Washington, DC. He made a point of visiting these parties as they passed through Albany and New York. On several occasions, he followed them all the way to Washington to observe them for longer. He also talked to the military officers and interpreters who accompanied them.