The Santa Clara Valley has been home to the Tamyen group of the Ohlone people since around 4,000 BC. The Tamyen spoke Tamyen language of the Ohlone language family. With the Spanish colonization of California, the majority of the Tamyen came to inhabit Mission Santa Clara de Asís and Mission San José.

California was claimed as part of the Spanish Empire in 1542, when explorer Juan Rodríguez Cabrillo charted the Californian coast. During this time, California and Baja California were administered together as Province of the California (Spanish: Provincia de las California). For nearly 200 years, the Californias were sparsely populated and largely ignored by the government of the Viceroyalty of New Spain in Mexico City. Only in 1769 was Northern California finally surveyed by Spanish authorities, with the Portolá Expedition.

In 1776, the Californias were included as part of the Captaincy General of the Provincias Internas, a large administrative division created by José de Gálvez, Spanish Minister of the Indies, in order to provide greater autonomy for the Spanish Empire's lightly populated and largely ungoverned borderlands. That year, King Carlos III of Spain approved an expedition by Juan Bautista de Anza to survey the San Francisco Bay Area, in order to choose the sites for two future settlements and their accompanying mission. First he chose the site for a military settlement in San Francisco, for the Royal Presidio of San Francisco, and Mission San Francisco de Asís. On his way back to Mexico from San Francisco, de Anza chose the sites in Santa Clara Valley for a civilian settlement, San Jose, on the eastern bank of the Guadalupe River, and a mission on its western bank, Mission Santa Clara de Asís.

San Jose was officially founded as California's first civilian settlement on November 29, 1777, as the Pueblo de San José de Guadalupe by José Joaquín Moraga, under orders of Antonio María de Bucareli y Ursúa, Viceroy of New Spain. San Jose served as a strategic settlement along El Camino Real, connecting the military fortifications at the Monterey Presidio and the San Francisco Presidio, as well as the California mission network. In 1791, due to the severe flooding which characterized the pueblo, San Jose's settlement was moved approximately a mile south, centered on the Pueblo Plaza (modern-day Plaza de César Chávez).

In 1800, due to the growing population in the northern part of the Californias, Diego de Borica, Governor of the Californias, officially split the province into two parts: Alta California (Upper California), which would eventually become a U.S. state, and Baja California (Lower California), which would eventually become two Mexican states.

San Jose became part of the First Mexican Empire in 1821, after Mexico's War of Independence was won against the Spanish Crown, and in 1824, part of the First Mexican Republic. With its newfound independence, and the triumph of the republican movement, Mexico set out to diminish the Catholic Church's power within Alta California by secularizing the California missions in 1833.^{[citation needed]}

In 1824, in order to promote settlement and economic activity within sparsely populated California, the Mexican government began an initiative, for Mexican and foreign citizens alike, to settle unoccupied lands in California. Between 1833 and 1845, thirty-eight rancho land grants were issued in the Santa Clara Valley, 15 of which were located within modern-day San Jose's borders. Numerous prominent historical figures were among those granted rancho lands in the Santa Valley, including James A. Forbes, founder of Los Gatos, California (granted Rancho Potrero de Santa Clara), Antonio Suñol, Alcalde of San Jose (granted Rancho Los Coches), and José María Alviso, Alcalde of San Jose (granted Rancho Milpitas).^{[citation needed]}

In 1835, San Jose's population of approximately 700 people included 40 foreigners, primarily Americans and Englishmen. By 1845, the population of the pueblo had increased to 900, primarily due to American immigration. Foreign settlement in San Jose and California was rapidly changing Californian society, bringing expanding economic opportunities and foreign culture.

By 1846, native Californios had long expressed their concern for the overrunning of California society by its growing and wealthy Anglo-American community. During the 1846 Bear Flag Revolt revolt, Captain Thomas Fallon led nineteen volunteers from Santa Cruz to the pueblo of San Jose, which his forces easily captured. The raising of the flag of the California Republic ended Mexican rule in Alta California on July 14, 1846.

By the end of 1847, the Conquest of California by the United States was complete, as the Mexican–American War came to an end. In 1848, the Treaty of Guadalupe Hidalgo formally ceded California to the United States, as part of the Mexican Cession. On December 15, 1849, San Jose became the capital of the unorganized territory of California. With California's Admission to the Union on September 9, 1850, San Jose became the state's first capital.

On March 27, 1850, San Jose was incorporated. It was incorporated on the same day as San Diego and Benicia; together, these three cities followed Sacramento as California's earliest incorporated cities.Josiah Belden, who had settled in California in 1842 after traversing the California Trail as part of the Bartleson Party and later acquired a fortune, was the city's first mayor. San Jose was briefly California's first state capital; legislators met in the city from 1849 to 1851. (Monterey was the capital during the period of Spanish California and Mexican California). The first capitol no longer exists; the Plaza de César Chávez now lies on the site, which has two historical markers indicating where California's state legislature first met.

In the period 1900 through 1910, San Jose served as a center for pioneering invention, innovation, and impact in both lighter-than-air and heavier-than-air flight. These activities were led principally by John Montgomery and his peers. The City of San Jose has established Montgomery Park, a Monument at San Felipe and Yerba Buena Roads, and John J. Montgomery Elementary School in his honor. During this period, San Jose also became a center of innovation for the mechanization/industrialization of agricultural and food processing equipment.

Though not affected as severely as San Francisco, San Jose also suffered significant damage from the 1906 San Francisco earthquake. Over 100 people died at the Agnews Asylum (later Agnews State Hospital) after its walls and roof collapsed, and San Jose High School's three-story stone-and-brick building was also destroyed. The period during World War II was a tumultuous time. Japanese Americans primarily from Japantown were sent to internment camps, including the future mayor Norman Mineta. Following the Los Angeles zoot suit riots, anti-Mexican violence took place during the summer of 1943. In 1940, the Census Bureau reported San Jose's population as 98% white.

As World War II started, the city's economy shifted from agriculture (the Del Monte cannery was the largest employer and closed in 1999) to industrial manufacturing with the contracting of the Food Machinery Corporation (later known as FMC Corporation) by the United States War Department to build 1,000 Landing Vehicle Tracked. After World War II, FMC (later United Defense, and currently BAE Systems) continued as a defense contractor, with the San Jose facilities designing and manufacturing military platforms such as the M113 Armored Personnel Carrier, the Bradley Fighting Vehicle, and various subsystems of the M1 Abrams battle tank.

IBM established its West Coast headquarters in San Jose in 1943 and opened a downtown research and development facility in 1952. Both would prove to be harbingers for the economy of San Jose, as Reynold Johnson and his team would later invent RAMAC, as well as the hard disk drive, and the technological side of San Jose's economy grew.

The Ford Motor Company relocated its factory in Richmond to a new location in the suburb of Milpitas, called the San Jose Assembly Plant, which was one of the primary locations for manufacturing the Ford Mustang.^{[citation needed]}

During the 1950s and 1960s, City Manager A. P. "Dutch" Hamann led the city in a major growth campaign. The city annexed adjacent areas, such as Alviso and Cambrian Park, providing large areas for suburbs. An anti-growth reaction to the effects of rapid development emerged in the 1970s, championed by mayors Norman Mineta and Janet Gray Hayes. Despite establishing an urban growth boundary, development fees, and the incorporations of Campbell and Cupertino, development was not slowed, but rather directed into already-incorporated areas.

On April 3, 1979, the San Jose City Council adopted San José, with the diacritical mark on the "e", as the spelling of the city name on the city seal, official stationery, office titles and department names. Also, by city council convention, this spelling of San José is used when the name is stated in mixed upper- and lower-case letters, but not when the name is stated only in upper-case letters. The accent reflects the Spanish version of the name, and the dropping of accents in all-capital writing was typical in Spanish. While San José is commonly spelled both with and without the acute accent over the "e", the city's official guidelines indicate that it should be spelled with the accent most of the time and sets forth narrow exceptions, such as when the spelling is in URLs, when the name appears in all-capital letters, when the name is used on social media sites where the diacritical mark does not render properly, and where San Jose is part of the proper name of another organization or business, such as San Jose Silicon Valley Chamber of Commerce, that has chosen not to use the accent-marked name. The 1965 city charter, as amended, states the name of the municipality as City of San José, with the accent mark. The city's website appears to use a mixture of both; for example, the "City of San José" in the text uses the mark but the "City of San Jose" logo image does not.

San Jose's position in Silicon Valley triggered further economic and population growth. Results from the 1990 U.S. Census indicated that San Jose surpassed San Francisco as the most populous city in the Bay Area for the first time. This growth led to the highest housing-cost increase in the nation, 936% between 1976 and 2001. Efforts to increase density continued into the 1990s when an update of the 1974 urban plan kept the urban growth boundaries intact and voters rejected a ballot measure to ease development restrictions in the foothills. Sixty percent of the housing built in San Jose since 1980 and over three-quarters of the housing built since 2000 have been multifamily structures, reflecting a political propensity toward Smart Growth planning principles.

In 2014, the U.S. Census Bureau released its new population estimates. With a total population of 1,015,785, San Jose became the 11th U.S. city to hit the 1 million mark, even though it is currently the 10th most populous city.

The 2010 United States Census reported that San Jose had a population of 945,942. The population density was 5,256.2 people per square mile (2,029.4/km²). The racial makeup of San Jose was 404,437 (42.8%) White, 303,138 (32.0%) Asian (10.4% Vietnamese, 6.7% Chinese, 5.6% Filipino, 4.6% Indian, 1.2% Korean, 1.2% Japanese, 0.3% Cambodian, 0.2% Thai, 0.2% Pakistani, 0.2% Laotian), 30,242 (3.2%) African American, 8,297 (0.9%) Native American, 4,017 (0.4%) Pacific Islander, 148,749 (15.7%) from other races, and 47,062 (5.0%) from two or more races. There were 313,636 residents of Hispanic or Latino background (33.2%). 28.2% of the city's population was of Mexican descent; the next largest Hispanic groups were those of Salvadoran (0.7%) and Puerto Rican (0.5%) heritage. Non-Hispanic Whites were 28.7% of the population in 2010, down from 75.7% in 1970.

The census reported that 932,620 people (98.6% of the population) lived in households, 9,542 (1.0%) lived in non-institutionalized group quarters, and 3,780 (0.4%) were institutionalized. There were 301,366 households, out of which 122,958 (40.8%) had children under the age of 18 living in them, 162,819 (54.0%) were opposite-sex married couples living together, 37,988 (12.6%) had a female householder with no husband present, 18,702 (6.2%) had a male householder with no wife present. There were 16,900 (5.6%) unmarried opposite-sex partnerships, and 2,458 (0.8%) same-sex married couples or partnerships. 59,385 households (19.7%) were made up of individuals, and 18,305 (6.1%) had someone living alone who was 65 years of age or older. The average household size was 3.09. There were 219,509 families (72.8% of all households); the average family size was 3.54.

The age distribution of the city was as follows: 234,678 people (24.8%) were under the age of 18, 89,457 people (9.5%) aged 18 to 24, 294,399 people (31.1%) aged 25 to 44, 232,166 people (24.5%) aged 45 to 64, and 95,242 people (10.1%) who were 65 years of age or older. The median age was 35.2 years. For every 100 females, there were 101.1 males. For every 100 females age 18 and over, there were 99.8 males.

There were 314,038 housing units at an average density of 1,745.0 per square mile (673.7/km²), of which 176,216 (58.5%) were owner-occupied, and 125,150 (41.5%) were occupied by renters. The homeowner vacancy rate was 1.6%; the rental vacancy rate was 4.3%. 553,436 people (58.5% of the population) lived in owner-occupied housing units and 379,184 people (40.1%) lived in rental housing units.

As of the census of 2000, there were 894,943 people, 276,598 households, and 203,576 families residing in the city.

The population density was 5,117.9 people per square mile (1,976.1/km²). There were 281,841 housing units at an average density of 1,611.8 per square mile (622.3/km²). Of the 276,598 households, 38.3% had children under the age of 18 living with them, 56.0% were married couples living together, 11.7% had a female householder with no husband present, and 26.4% were non-families. 18.4% of all households were made up of individuals, and 4.9% had someone living alone who was 65 years of age or older. The average household size was 3.20 and the average family size was 3.62.

In the city, the age distribution of the population shows 26.4% under the age of 18, 9.9% from 18 to 24, 35.4% from 25 to 44, 20.0% from 45 to 64, and 8.3% who were 65 years of age or older. The median age was 33 years. For every 100 females, there were 103.3 males. For every 100 females age 18 and over, there were 102.5 males.

According to a 2007 estimate, the median income for a household in the city was the highest in the U.S. for any city with more than a quarter-million residents with $76,963 annually. The median income for a family was $86,822. Males had a median income of $49,347 versus $36,936 for females. The per capita income for the city was $26,697. About 6.0% of families and 8.8% of the population were below the poverty line, including 10.3% of those under age 18 and 7.4% of those age 65 or over.