The original colony, named New Helvetia, was settled on land bought by the Swiss pioneer John Sutter in 1839; Fort Sutter was built in 1844. Established at a point where the first transcontinental routes converged, it developed as an important trading station, midway between San Francisco and the goldfields of the Sierra Nevada. In 1848 gold was discovered nearby at Sutter's Mill, an old sawmill. Most of the townspeople left New Helvetia for the diggings and John Sutter's son took over an area nearby which he called Sacramento City. This area then prospered in the gold rush. The town was devastated by floods in 1850, 1852, and 1862. It became the western terminus of the Pony Express in 1860, and of the first US transcontinental railway in 1869. A deep-water channel to Suisson Bay in the San Francisco Bay area, 69 km/43 mi long, was completed in 1963.

Sacramento has 55 entries on the National Register of Historic Places including the State Capitol (1860) and the Pony Express Terminal (1860). Old Sacramento, its historic former centre, has been extensively restored and is a National Landmark and a State Historic Park. Military establishments include an army depot and the McClellan Air Force base. The city is the seat of California State University, Sacramento (1947), and a state agricultural experiment station lies nearby at Davis. Cultural sites include the Californian State Railroad Museum, the Indian Museum, and a reconstruction of the old town of Fort Sutter. The city is also the site of the California State Fair, founded in 1854 and which has been held in Sacramento since 1859.