The earliest known inhabitants were the Huchiun natives, who lived there for thousands of years. The Huchiun belonged to a linguistic grouping later called the Ohlone (a Miwok word meaning "western people"). In Oakland, they were concentrated around Lake Merritt and Temescal Creek, a stream that enters the San Francisco Bay at Emeryville.

In 1772, the area that later became Oakland was colonized, along with the rest of California, by Spanish settlers for the King of Spain. In the early 19th century, the Spanish crown granted the East Bay area to Luis María Peralta for his Rancho San Antonio. The grant was confirmed by the successor Mexican republic upon its independence from Spain. Upon his death in 1842, Peralta divided his land among his four sons. Most of Oakland fell within the shares given to Antonio Maria and Vicente. The portion of the parcel that is now Oakland was called Encinar (misrendered at an early date and carried forward as "encinal") —Spanish for "oak grove"—due to the large oak forest that covered the area, which eventually led to the city's name.

According to Stanford University historian Albert Camarillo, the Peralta family struggled to keep their land after the incorporation of California into the United States after the Mexican–American War. Camarillo claims the family was the victim of targeted racial violence. He writes in Chicanos in California, "They lost everything when squatters cut down their fruit trees, killed their cattle, destroyed their buildings, and even fenced off the roads leading to the rancho. Especially insidious were the actions of attorney Horace Carpentier, who tricked Vicente Peralta into signing a 'lease' which turned out to be a mortgage against the 19,000-acre rancho. The lands became Carpentier's when Peralta refused to repay the loan he believed was fraudulently incurred. The Peraltas had no choice but to abandon the homesite they had occupied for two generations."

During the 1850s—just as gold was discovered in California—Oakland started growing and further developing because land was becoming too expensive in San Francisco. The Chinese were struggling financially as a result of the First Opium War, the Second Opium War, and the Taiping Rebellion, so they began migrating to Oakland, many of whom were recruited to work on railroads. However, the Chinese struggled to settle because they were discriminated against by the white community and their living quarters were burned down on several occasions. The majority of the Chinese migrants lived in unhealthy conditions in China and they often had diseases, so plague spread into San Francisco even though the Chinese were thoroughly inspected for diseases upon their arrival to San Francisco.

In 1851, three men—Horace Carpentier, Edson Adams, and Andrew Moon—began developing what is now downtown Oakland. In 1852, the Town of Oakland was incorporated by the state legislature. During this time, Oakland had 75–100 inhabitants, two hotels, a wharf, two warehouses, and only cattle trails. Two years later, on March 25, 1854, Oakland re-incorporated as the City of Oakland. Horace Carpentier was elected the first mayor, though a scandal ended his mayorship in less than a year.

The city and its environs quickly grew with the railroads, becoming a major rail terminal in the late 1860s and 1870s. In 1868, the Central Pacific constructed the Oakland Long Wharf at Oakland Point, the site of today's Port of Oakland.

A number of horsecar and cable car lines were constructed in Oakland during the latter half of the 19th century. The first electric streetcar set out from Oakland to Berkeley in 1891, and other lines were converted and added over the course of the 1890s. The various streetcar companies operating in Oakland were acquired by Francis "Borax" Smith and consolidated into what eventually became known as the Key System, the predecessor of today's publicly owned AC Transit.

Oakland was one of the worst affected cities in California that was impacted by the plague epidemic. Quarantine measures were set in place at the Oakland ports requiring the authorities at the port to inspect the arriving vessels for the presence of infected rats. Quarantine authorities at these ports inspected over a thousand vessels per year for plague and yellow fever. By 1908, over 5,000 people were detained in quarantine. Hunters were sent to poison the affected areas in Oakland and shoot the squirrels, but the eradication work was limited in its range because the State Board of Health and the United States Public Health Service were only allotted about $60,000 a year to eradicate the disease. During this period Oakland did not have sufficient health facilities, so some of the infected patients were treated at home.

The State Board of Health along with Oakland also advised physicians to promptly report any cases of infected patients. Yet, in 1919 it still resulted in a small epidemic of Pneumonic plague which killed a dozen people in Oakland. This started when a man went hunting in Contra Costa Valley and killed a squirrel. After eating the squirrel, he fell ill four days later and another household member contracted the plague. This in turn was passed on either directly or indirectly to about a dozen others. The officials in Oakland acted quickly by issuing death certificates to monitor the spread of plague.

At the time of incorporation in 1852, Oakland had consisted of the territory that lay south of today's major intersection of San Pablo Avenue, Broadway, and Fourteenth Street. The city gradually annexed farmlands and settlements to the east and the north. Oakland's rise to industrial prominence, and its subsequent need for a seaport, led to the digging of a shipping and tidal channel in 1902. This resulted in the nearby town of Alameda being made an island. In 1906, the city's population doubled with refugees made homeless after the 1906 San Francisco earthquake and fire.

In 1908 lawyer, former miner and newspaper owner Homer Wood (1880–1976) suggested to his friend Frank Bilger of Blake and Bilger Rock Quarry and Paving Company that he organize a gathering to establish a Rotary Club east of the bay. On November 27, 1908 Homer took a ferry across the bay in a driving rainstorm and met for lunch with Frank and twenty three other businessmen at the Hotel Metropole at 13th and Jefferson. This gathering became the first meeting of the Tri-City Rotary Club, renamed in 1911 The Rotary Club of Oakland, the third Rotary Club in the world. This group established the tradition of weekly meetings, something most clubs worldwide follow today.

In 1916, General Motors opened an automobile factory in East Oakland called Oakland Assembly. It produced Chevrolet cars and then GMC trucks until 1963, when it was moved to Fremont in southern Alameda County. Also in 1916, the Fageol Motor Company chose East Oakland for their first factory, manufacturing farming tractors from 1918 to 1923. By 1920, Oakland was the home of numerous manufacturing industries, including metals, canneries, bakeries, internal combustion engines, automobiles, and shipbuilding. By 1929, when Chrysler expanded with a new plant there, Oakland had become known as the "Detroit of the West," referring to the major auto manufacturing center in Michigan.

Oakland expanded during the 1920s, as its population expanded with factory workers. Approximately 13,000 homes were built in the 3 years between 1921 and 1924, more than during the 13 years between 1907 and 1920. Many of the large downtown office buildings, apartment buildings, and single-family houses still standing in Oakland were built during the 1920s; they reflect the architectural styles of the time.

Russell Clifford Durant established Durant Field at 82nd Avenue and East 14th Street in 1916. The first transcontinental airmail flight finished its journey at Durant Field on August 9, 1920, flown by Army Capt. Eddie Rickenbacker and Navy Lt. Bert Acosta. Durant Field was often called Oakland Airport, though the current Oakland International Airport was soon established four miles (6.4 km) to the southwest.

During World War II, the East Bay Area was home to many war-related industries. Oakland's Moore Dry Dock Company expanded its shipbuilding capabilities and built over 100 ships. Valued at $100 million in 1943, Oakland's canning industry was its second-most-valuable war contribution after shipbuilding. The largest canneries were in the Fruitvale District, and included the Josiah Lusk Canning Company, the Oakland Preserving Company (which started the Del Monte brand), and the California Packing Company.

President Franklin D. Roosevelt called on defense industries with government contracts to integrate their workforces and provide opportunities for all Americans. Tens of thousands of laborers came from around the country, especially poor whites and blacks from the Deep South: Alabama, Arkansas, Georgia, Louisiana, Mississippi, South Carolina, and Texas, as well as Missouri and Tennessee. Henry J. Kaiser's representatives recruited sharecroppers and tenant farmers from rural areas to work in his shipyards. African Americans were part of the Great Migration by which five million persons left the South, mostly for the West, from 1940 to 1970. White migrants from the Jim Crow South carried their racial attitudes, causing tensions to rise among black and white workers competing for the better-paying jobs in the Bay Area. The racial harmony Oakland African-Americans had been accustomed to prior to the war evaporated. Also migrating to the area during this time were many Mexican Americans from southwestern states such as New Mexico, Texas, and Colorado. Many worked for the Southern Pacific Railroad, at its major rail yard in West Oakland. Their young men encountered hostility and discrimination by Armed Forces personnel, and tensions broke out in "zoot suit riots" in downtown Oakland in 1943 in the wake of a major disturbance in Los Angeles that year.

In 1946, National City Lines (NCL), a General Motors holding company, acquired 64% of Key System stock; during the next several years NCL engaged in the conspiratorial dissolution of Oakland's electric streetcar system. The city's expensive electric streetcar fleet was converted to the cheaper diesel buses. The state Legislature created the Alameda and Contra Costa Transit District in 1955, which operates today as AC Transit, the third-largest bus-only transit system in the nation.

Soon after the war, as Oakland's shipbuilding industry declined and the automobile industry went through restructuring, many jobs were lost. Economic competition increased racial tension. In addition, labor unrest increased as workers struggled to protect their livelihoods. Oakland was the center of a general strike during the first week of December 1946, one of six cities across the country that had such a strike after World War II.

In 1960, Kaiser Corporation opened its new headquarters; it was the largest skyscraper in Oakland, as well as "the largest office tower west of Chicago" up to that time. In the postwar period, suburban development increased around Oakland, and wealthier residents moved to new housing. Despite the major increases in the number and proportion of African Americans in the city, in 1966 only 16 of the city's 661 police officers were black. Tensions between the black community and the largely white police force were high, as expectations during the civil rights era increased to gain social justice and equality before the law. Police abuse of blacks was common.

Students Huey Newton and Bobby Seale founded the Black Panther Party at Merritt College (then located at a former high school on Grove Street, now occupied by Children's Hospital Oakland Research Institute), which emphasized black power, advocated armed self-defense against police brutality, and was involved in several incidents that ended in the deaths of police officers and other Black Panther members. Among their social programs were feeding children and providing other services to the needy. During the 1970s, Oakland began to suffer serious violence and other problems related to gang-controlled dealing of heroin and cocaine when drug kingpin Felix Mitchell created the nation's first large-scale operation of this kind. Both violent crime and property crime increased during this period, and Oakland's murder rate rose to over twice that of San Francisco and New York.

As in many other American cities during the 1980s, crack cocaine became a serious problem in Oakland. Drug dealing in general, and the dealing of crack cocaine in particular, resulted in elevated rates of violent crime, causing Oakland to consistently be listed as one of America's most crime-ridden cities.

In 1980 Oakland's black population reached its 20th-century peak at approximately 47% of the overall city population.

The 6.9 M_w Loma Prieta earthquake occurred on October 17, 1989. The rupture was related to the San Andreas fault system and affected the entire San Francisco Bay Area with a maximum Mercalli intensity of IX (Violent). Many structures in Oakland were badly damaged including the double-decker portion of Interstate 880 that collapsed. The eastern span of the San Francisco–Oakland Bay Bridge also sustained damage and was closed to traffic for one month.

On October 20, 1991, a massive firestorm swept down from the Berkeley/Oakland hills above the Caldecott Tunnel. Twenty-five people were killed, 150 people were injured, and nearly 4,000 homes destroyed. With the loss of life and an estimated economic loss of US$1.5 billion, this was the worst urban firestorm in American history, until 2017.

During the mid-1990s, Oakland's economy began to recover as it transitioned to new types of jobs. In addition, the city participated in large development and urban renewal projects, concentrated especially in the downtown area, at the Port of Oakland, and at the Oakland International Airport.

After his 1999 inauguration, Oakland Mayor Jerry Brown continued his predecessor Elihu Harris' public policy of supporting downtown housing development in the area defined as the Central Business District in Oakland's 1998 General Plan. Brown's plan and other redevelopment projects were controversial due to potential rent increases and gentrification, which would displace lower-income residents from downtown Oakland into outlying neighborhoods and cities.

Due to allegations of misconduct by the Oakland Police Department, the City of Oakland has paid claims for a total of US$57 million during the 2001–2011 timeframe to plaintiffs claiming police abuse; this is the largest sum paid by any city in California. On October 10, 2011, protesters and civic activists began "Occupy Oakland" demonstrations at Frank Ogawa Plaza in Downtown Oakland.

African-Americans dropped to 28% of Oakland's population in 2010, from nearly half in 1980, due to fast-rising rents and an extreme housing crisis in the region.

The city inspected many warehouses and live/work spaces after a fire broke out in the Ghost Ship warehouse, killing 36 people in 2016.

Oakland is the second U.S. city, after Denver, to decriminalize psilocybin mushrooms. In June 2019, the City Council passed the resolution in a unanimous vote ending the investigation and imposition of criminal penalties for use and possession of natural entheogens.

In November 2019, two homeless mothers and their children moved into a vacant three bedroom house in West Oakland. The group, calling themselves Moms 4 Housing, said their goal was to protest what they said was a large number of vacant houses in Oakland owned by redevelopment companies while the city experienced a housing crisis. Two months later they were evicted from the house by three dozen sheriff's deputies, as hundreds of supporters demonstrated in favor of the women. The incident received nationwide coverage. The company that owns the house later said they would sell it to a nonprofit affordable housing group. As of 2019, Oakland's per-capita homeless rate is higher than San Francisco and Berkeley.

The 2010 United States Census reported Oakland had a population of 390,724. The population density was 5,009.2 inhabitants per square mile (1,934.1/km²). The racial makeup of Oakland was 134,925 (34.5%) White (non-Hispanic White 25.9%), 129,471 (28.0%) African American, 3,040 (0.8%) Native American, 65,811 (16.8%) Asian (8.7% Chinese, 2.2% Vietnamese, 1.6% Filipino, 0.7% Cambodian, 0.7% Laotian, 0.6% Korean, 0.5% Japanese, 0.5% Indian, 0.1% Mongolian), 2,222 (0.6%) Pacific Islander (0.3% Tongan), 53,378 (13.7%) from other races, and 21,877 (5.6%) from two or more races. Hispanic or Latino of any race were 99,068 persons (25.4%). 18.1% of the population were of Mexican descent, 1.9% Salvadoran, 1.3% Guatemalan, and 0.7% Puerto Rican.

According to 2018 US Census Bureau estimates, Oakland's population rose to 429,114, and was 35.1% White (29.0% Non-Hispanic White and 6.1% Hispanic White), 23.2% Black or African American, 0.9% Native American and Alaskan Native, 15.3% Asian, 0.8% Pacific Islander, 17.8% Some Other Race, and 7.0% from two or more races.

White Americans are now the largest racial/ethnic group at either 35.1% (including White Hispanics) or 29.0% (excluding White Hispanics).

Hispanics have been the second largest ethnic group since 2012 when they displaced the Black population. However, Black Americans still form the 2nd largest racial group. By ethnicity, 26.5% of the total population is Hispanic-Latino (of any race) and 73.5% is Non-Hispanic (of any race). The majority of Hispanics self-identify as Other Race (65.9%) with the remainder choosing White (22.9%), Multiracial (6.9%), Black (1.6%), American Indian and Alaskan Native (2.0%), Asian (0.5%), and Hawaiian and Pacific Islander (0.3%).

The Black population are the third largest ethnic group, and 2nd largest racial group at either 25.2% (including Black Hispanics) or 22.8% excluding Black Hispanics.

The Asian population continues to remain the fourth largest group at 15.2% of the population.

The greater Oakland area^[specify] has the fifth largest cluster of "elite zip codes" ranked by the number of households with the highest combination of income and education. 37.9% of residents over 25 years of age have bachelor's degree or higher. Oakland ranked among the top cities with residents with bachelor's degrees and graduate degrees per square mile.

Oakland ranks in the top 20 of American cities in median household income, with a 2012 value of US$51,863. In 2012, the median income for a household in the city was US$51,863 and the median income for a family was US$59,459. The mean income for a household was US$77,888 and the mean income for a family was US$90,948. Males had a median income of US$50,140 versus US$50,304 for females. The unemployment rate as of December 2013 was 9.7%.

In 2007 approximately 15.3 percent of families and 17.0 percent of the general population were below the poverty line, including 27.9 percent of those under age 18 and 13.1 percent of those age 65 or over. 0.7% of the population is homeless. Home ownership is 41% and 14% of rental units are subsidized.

As of the census of 2000, 19.4% of the population and 16.2% of families were below the poverty line. Out of the total population, 27.9% of those under the age of 18 and 13.1% of those 65 and older were living below the poverty line.

The census reported 382,586 people (97.9% of the population) lived in households, 5,675 (1.5%) lived in non-institutionalized group quarters, and 2,463 (0.6%) were institutionalized.

There were 153,791 households, out of which 44,762 (29.1%) had children under the age of 18 living in them, 50,797 (33.0%) were opposite-sex married couples living together, 24,122 (15.7%) had a female householder with no husband present, 8,799 (5.7%) had a male householder with no wife present. There were 11,289 (7.3%) unmarried opposite-sex partnerships, and 3,442 (2.2%) same-sex married couples or partnerships. 52,103 households (33.9%) were made up of individuals, and 13,778 (9.0%) had someone living alone who was 65 years of age or older. The average household size was 2.49. There were 83,718 families (54.4% of all households); the average family size was 3.27.

The population was spread out, with 83,120 people (21.3%) under the age of 18, 36,272 people (9.3%) aged 18 to 24, 129,139 people (33.1%) aged 25 to 44, 98,634 people (25.2%) aged 45 to 64, and 43,559 people (11.1%) who were 65 years of age or older. The median age was 36.2 years. For every 100 females, there were 94.2 males. For every 100 females age 18 and over, there were 91.8 males.

There were 169,710 housing units at an average density of 2,175.7 per square mile (840.0/km²), of which 153,791 were occupied, of which 63,142 (41.1%) were owner-occupied, and 90,649 (58.9%) were occupied by renters. The homeowner vacancy rate was 3.0%; the rental vacancy rate was 8.5%. 166,662 people (42.7% of the population) lived in owner-occupied housing units and 215,924 people (55.3%) lived in rental housing units.

Oakland has consistently ranked as one of the most ethnically diverse major cities in the country. A 2019 analysis by WalletHub showed that Oakland was the most ethnoracially diverse city in the United States. The city's formerly most populous ethnic group, whites, declined from 95.3% in 1940 to 32.5% by 1990, due to a combination of factors, including suburbanization. Oakland became a destination for African Americans in the Great Migration during and after World War II as they gained high-paying jobs in the defense industry. Blacks have formed a plurality in Oakland for many years, peaking in 1980 at about 47% of the population.

Oakland's black population decreased by nearly 25 percent between 2000 and 2010. The city's demographics have changed due to a combination of rising housing prices associated with gentrification and with blacks relocating to better housing in Bay Area suburbs or moving to the Southern United States in a reverse migration, where conditions are considered to have improved. This trends and cultural shifts have led to a decline among some of Oakland's long standing black institutions, such as churches, businesses and nightclubs, which had developed during the growing years of the 1950s through 1970.

In the 2010 census African Americans maintained their status as Oakland's single largest ethnic group, with 27% of the population, followed by non-Hispanic whites at 25.9%, and Hispanics of any race at 25.4%. Ethnic Asians constitute 17%, followed by smaller minority groups.

Many immigrants have settled in the city. Immigrants and others have marched by the thousands down Oakland's International Boulevard in support of legal reforms benefiting undocumented immigrants.

An analysis by the Urban Institute of U.S. Census 2000 numbers showed Oakland had the third-highest concentration of gays and lesbians among the 50 largest U.S. cities, behind San Francisco and Seattle. Census data showed that among incorporated places that have at least 500 female couples, Oakland had the nation's largest proportion. In the 2000 census, 2,650 lesbian couples identified as such in Oakland; one in every 41 Oakland couples identified as a same-sex female partnership.

As of 2020, the San Francisco-Oakland Metro shows indications of having the greatest intensity of gentrification nationally, with over 31% of eligible neighborhoods gentrifying. Gentrifying neighborhoods showed significant increases in median home value, median household income, percentage of college educated residents, but also in economic inequality.

Historically low-income neighborhoods have been rapidly changed by new, higher-income residents as high-wage tech workers and expensive housing have continued to push lower-wage residents out of Oakland. In West Oakland, for example, median household income rose from $80,700 to $86,300 between 2010 and 2017, while the percent of population with four-year degrees rose from one-third to nearly one-half, according to the National Community Reinvestment Coalition.

Big tech companies have continued to transform the communities and culture of Oakland as modern apartments have appeared, housing prices have spiked, and many prior working-class residents have moved to suburbs further inland.

According to 2015 data compiled by the Bay Area Equity Atlas, 91% of low-income households of color were either in neighborhoods that were gentrifying or were at risk of gentrification at the time. The number was higher for individual low-income communities, with 96% of Native American households in neighborhoods that either experienced gentrification or were at risk of being gentrified, followed by Latino households at 94%, Black households at 92%, and Asian or Pacific Islander households at 88%.