Prospectors arrived in spring 1850, and a settlement was founded that year. In the winter of 1852 to 1853, an avalanche destroyed it. It was rebuilt several years later near the Sierra Buttes, and had about 3,000 people at its peak.
The Sierra City area produced more than $30 million in gold over the years. The town sits on Highway 49, about twelve miles northeast of Downieville. The 2020 census counted 235 people.
On Main Street are the Masonic Lodge No. 164 and the Old Sierra City Hotel, built in 1886. The three-story brick Busch & Heringlake Building, laid with local bricks in 1871 and used by Wells Fargo Express, burned in 1948.

