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If you don't count the "whey diet" — a grim 19th-century health regime that involved drinking nothing but a pungent, watery by-product of goat's milk — then the picturesque Swiss town of Heiden has just one historical claim to fame. Fortunately, it's a big one.

The year is 1887. Nestling in the Alpine foothills, Heiden is well known among high-society Europeans for its health spas, crisp air and bracing view over Lake Constance. A doctor called Hermann Altherr visits a patient at a local guesthouse. It is an old man, exhausted and half-paralyzed with eczema, and clearly of limited means. Like an explorer chancing upon a long-lost jungle ruin, Altherr is startled to discover that his patient is Henry Dunant, founder of the Red Cross movement. The doctor — and much of the rest of the world — had assumed him long dead.

Dunant spent the last quarter of an extraordinary life in Heiden, most of it in a single room in the town's old hospital. He died there on October 30, 1910. Today, a museum in the same building presides over a series of events to mark the centenary of his death. Heiden rescued Dunant from obscurity — it was here that a telegram arrived in 1901, announcing that he had won the first-ever Nobel Peace Prize — then fell into obscurity itself. Now the town hopes its most celebrated resident will put it back on the map.

In its heyday, Heiden was regarded as a lower-altitude alternative to swankier Swiss resorts such as Davos and St. Moritz. But the Great Depression killed off its spa industry, and today it must compete for tourists with countless other scenic and well-preserved Swiss towns. Heiden (pop. about 4,000) is part of Appenzellerland, a bucolic corner of eastern Switzerland famous for its dairy farms. The region is often overlooked by visitors on their way to the dramatic snow-capped peaks in the distance. This is a shame, since few places feel more authentically Swiss. The official website for Appenzellerland yodels and lows.

This year Heiden is making a noise about its most eminent resident, with exhibitions, concerts and an international youth camp. The Japanese city of Nagasaki has donated a replica of its Peace Bell, while American sprint legend Carl Lewis will lead hundreds of children in a "world harmony run" through the village. "It's not just about remembering Dunant," says Monika Gessler, Project Coordinator for the Dunant Year 2010 Association. "It's about giving young people an understanding of his values: solidarity, humanity and moral courage."

Dunant was born in 1828 in Geneva, about 200 miles away, to staunchly Calvinist parents who encouraged his early passion for social work among orphans, paupers and prisoners. He was a mediocre student, however, who dropped out of college to become an even worse businessman. In 1859, Dunant traveled to Solferino, in northern Italy, where he evidently believed that Napoleon III might pause from fighting Imperial Austria to intercede in his troubled business affairs in French-occupied Algeria. Then 31 years old, Dunant arrived in time to witness the aftermath of a nine-hour battle which had littered the rolling Italian countryside with tens of thousands of dead and wounded.

Medical care was meager — the French army had more veterinarians than doctors. So amid what he later described as "chaotic disorder, despair unspeakable, and misery of every kind," Dunant mobilized local volunteers — mostly women and girls — to care for the injured, whatever their nationality. Four years later, he and four other Genevans set up the International Committee for Relief to the Wounded, later to become the International Committee of the Red Cross (ICRC). Today, the movement has 97 million volunteers, supporters and staff in 186 countries.

Its distinctive emblem — an inverse of the Swiss flag — now decorates the windows of many Heiden businesses, as the town gears up to mark Dunant's death. The celebration is laced with irony, explains museum guide and local historian Corina Schmid-Maddalena. "Dunant couldn't stand Heiden people," she says cheerfully, "and they thought he was arrogant. He refused to speak German, while most locals couldn't speak a word of French." Reclusive and prone to bouts of depression and paranoia, Dunant was convinced that somebody was poisoning his food and opening his mail. During all his years in Heiden he made only a handful of friends.

Even today, you sense that not every Haedler — as Heiden people are called in one of Appenzell's thick dialects — cherishes Dunant's memory. Many locals have never visited the museum, admits Schmid-Maddalena. Perhaps they know that Dunant ended up here reluctantly, after a shocking reversal of fortune.

A decade that for Dunant began with triumph — in 1864, a year after the creation of the Red Cross, 12 governments adopted the first Geneva Convention — ended in disaster. His neglected business affairs collapsed, pauperizing him and wiping out investments by many friends and relatives. Bankrupt, he resigned from the International Committee in 1867 and left Geneva in shame, never to return. "Everything broke down around me, everything went dark," he wrote. He lived in a handful of countries over the next two decades, a fugitive from his creditors. Once, at a speech in the British city of Plymouth, he fainted, apparently due to hunger.

Settling in Heiden, ill-health brought him to Dr. Altherr's attention. But it was a 1895 article by a Swiss journalist which reintroduced Dunant to the world. "Without you, the Red Cross, the supreme humanitarian achievement of the nineteenth century would probably have never been undertaken," read the citation for his Nobel Peace Prize, which he shared with the French pacifist Frédéric Passy. Dunant had his prize money administered from Norway, so that his creditors couldn't get it.

"Would you like to try some whey?" asks Schmid-Maddalena, rummaging through a refrigerator during a tour of the museum. (Fortunately, she serves a drinkable modern variety, fortified with orange juice.) The tour includes a reconstruction of Dunant's room with his original armchair, its upholstery worn thin during his years of seclusion. Nearby hangs an equally ragged artifact from another era: a Red Cross flag used as a blanket by an ICRC delegate kidnapped in Angola in 1982.

The flag is a reminder of how much war has changed, and how fragile Dunant's cherished concept of neutrality sometimes seems. Almost everyone who perished at Solferino was a soldier, but civilians — among them humanitarians — do most of the dying in modern conflict. In 2008, more aid workers were killed than armed United Nations peacekeeping troops. Kidnappings continue: in March ICRC worker Gauthier Lefevre was freed after being held hostage in Darfur for 147 days.

"Let us raise our spirits and our souls above the narrow horizon of our small countries to see only humanity," wrote Dunant. His second-floor room — now the super-tidy office of a medical technician — still has its fine view of Heiden's clock tower, a landmark Dunant grew to hate as its bell fastidiously tolled away his final hours in quarter-hour segments. "How tiresome it is to die so slowly," he told Dr. Altherr. Dunant lived to the age of 82. He spurned both Heiden and his hometown of Geneva as a final resting place, requesting to be buried in Zurich "with no ceremony of any kind."

His death didn't sever Heiden's connection with the Red Cross. Consider this curious postscript. The year is 1944. With war in Europe raging to a close, a Heiden woman called Claire Kellenberger gives birth in the same hospital building in which Dunant drew his last breath. It is a boy. She calls him Jakob. Today, he is president of the ICRC.

• Andrew Marshall