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Prior to the discovery of gold in nearby Coloma, California by James W. Marshall in 1848 sparking the California Gold Rush, the small town now known as Placerville was known as Dry Diggin's after the manner in which the miners moved cartloads of dry soil to running water to separate the gold from the soil. Later in 1849, the town earned its most common historical name, "Hangtown" , due to the numerous hangings that had taken place there[5]. By 1850, the temperance league and a few local churches had begun to request that a more friendly name be bestowed upon the town. The name was not changed until 1854 when the City of Placerville was incorporated. At its incorporation Placerville was the third largest town in California. In 1857 the county seat was then moved from Coloma to Placerville, where it remains today.

Placerville was a central hub for the Mother Lode region's mining operations. The town had many services, including transportation (of people and goods), lodging, banking, and had a market and general store. The history of hard-rock mining is evidenced by an open and accessible Gold Bug Park & Mine, now a museum with tours and books.

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