California's most famous gold rush dates to the morning of January 24, 1848, when James Marshall made his customary inspection of the sawmill he was building for John Sutter. During the previous night, Marshall had diverted water through the mill's tailrace to wash away loose dirt and gravel, and on that fateful day, he noticed some shining flecks of metal left behind by the running water. He picked them up and showed them to his crew, but while he was pretty sure that it was gold, the full significance of his discovery was truly impossible to imagine. He was still concerned about getting the mill finished.

Word of Marshall's discovery leaked out and immediately set off a "rush to the mines." By the spring of 1849, the largest gold rush in American history was under way. At the time of Marshall's discovery, the state's non-Indian population numbered about 14,000. By the end of 1849, it had risen to nearly 100,000, and it continued to swell to some 250,000 by 1852.