Sierra County was formed from parts of Yuba County in 1852. The county derives its name from the Sierra Nevada.

Prior to the California Gold Rush, the area was home to both the Maidu and the Washoe peoples. They generally summered in the higher elevations to hunt and fish, and returned to lower elevations for the winter months. After the discovery of gold in the Sierra foothills sparked the California Gold Rush, more than 16,000 miners settled in Sierra County between 1848 and 1860. Most mining settlements in the county sprung up along the North and Middle Forks of the Yuba River, both of which had rich deposits of gold. While some of the mining boom towns faded away once gold fever died down, other settlements such as Downieville and Sierra City have remained.

Notable gold nuggets found in the county include a 26.5 pound specimen, avoirdupois, found by a group of sailors at Sailor Ravine, two miles above Downieville. A 51-pound specimen was found in 1853 by a group of Frenchmen in French Ravine. The 106 pound Monumental Nugget was found in Sept. 1869 at Sierra City.

The Bald Mountain drift mine in Forest City was founded in Aug. 1864, and was the largest of its kind in the state at the time. The Bald Mountain Extension was located in 1874 east of Forest. The Monte Cristo Mine was located in 1854. The largest quartz-mine is the Sierra Buttes Gold Mine, which was located in 1850 near Sierra City. The Gold Bluff Mine was located near Downieville in 1854. By 1880 the county was “crushing” 70,000 tons of quartz and had 266 miles of mining ditches.