In 1795 Beula was founded by Rev. Morgan John Rhees a Baptist minister who had left Wales to escape religious persecution. The town's lots, which were bought from Dr. Benjamin Rush of Philadelphia, were distributed by lottery. Beula was once a rival for the county seat of Cambria County, but was abandoned when Ebensburg won the appointment.
Due to the sudden loss of inhabitants Beula has been known to be "haunted". One story of the haunting goes as such. A man who wandered the now deserted lands of Beula in search of game fell asleep while resting from a long hunt. While he slept he dreampt of the once busy Beula, a stark contrast to the present day ghost town. As he awoke from his slumber a ghastly figure clad entirely in white with a "face calm and pale as death" was standing over him. This ghostly figures offered our young hunter words of comfort saying that she meant him no harm, but rather that she was lonley and doomed to roam the deserted hills for one hundred years because of a sin committed in her time of Earthly repose.