One of the first visitors to the area was the famous Spanish explorer, Juan Bautista de Anza, who led an expedition in 1776, through what is now Los Altos and Los Altos Hills on his way to explore the Bay of San Francisco.

Further exploration continued as the construction of California's missions by the Franciscans began under the leadership of Father Junipero Serra in the early 1700s. The closest mission to Los Altos, Mission Santa Clara, was dedicated in 1777. By 1833, the colonization of the missions came to a close in California with the Act of Secularization, which gave land to the Indians for homes while the church remained at the center of each pueblo community.

After winning independence from Spain in 1821, Mexico encouraged the settlement of California by offering land grants to any Catholic native or naturalized citizen of Mexico. The area which is now Los Altos was part of Rancho San Antonio, a land grant given in 1843 to Juan Prado Mesa, a soldier. Portions of present day Los Altos Hills were also included in Mesa's grant of one square league (4,438 acres).

The greater part of the land where Los Altos Hills is situated was part of Rancho la Purissima Concepcion granted in 1840 to Jose Gorgonio and his son, Jose Ramon, Indians from Mission Santa Clara.

American interest in California began with expeditions by John C. Fremont. After the War with Mexico, California was ceded to the United States under the Treaty of Guadalupe Hidalgo signed on February 2, 1848. California was admitted to the Union on September 9, 1850.

In 1854, Juana Briones de Miranda, purchased Rancho la Purissima Concepcion. Part of her adobe home still stands on Old Trace Road. Gradually, the ranchos were divided and sold as smaller ranches for cattle grazing, orchards, and vineyards. Wealthy San Franciscans also bought properties for summer and weekend retreats.

The initial development of Los Altos is credited to Paul Shoup, an executive of the Southern Pacific railroad, who wanted to link the cities of Palo Alto and Los Gatos by making Los Altos a commuter town on a proposed new rail line.

Attracted by the natural beauty of the land and its proximity to the county seat of San Jose and the cultural attraction of nearby Stanford University, Shoup joined with colleagues to form the Altos Land company in 1906. Advertising Los Altos as "the loveliest place on the peninsula", San Franciscans were offered free railroad excursions for a day in the country, along with complimentary picnics alongside the tracks in Los Altos.

By 1911 there were 50 homes in Los Altos and a few office buildings and stores on Main Street. Twelve steam trains a day stopped at the two-boxcar railway station. Eschenbreucher's Hardware Store, now 316 Main Street, was the first business in town and also housed the post office. Los Altos Water Company, Los Altos Building and Loan, Union Land Company and the railroad company all occupied offices in downtown Los Altos. In 1909, the two-story Shoup Building at Main and Second streets, housed a grocery store downstairs while upstairs one teacher taught all eight grades of the first public school classes in Los Altos.

As Paul Shoup envisioned, Los Altos grew and prospered. The business community thrived and orchards gave way to beautiful tree-lined residential streets. Following World War II, Los Altos experienced a boom in home construction and new schools were built in rapid succession to accommodate the expanding student population.

The town leaders in Los Altos, fearing annexation by neighboring cities, realized that incorporation was one way to control zoning and development. After a bitter campaign and an incorporation election, Los Altos became Santa Clara County's 11th city on December 1, 1952. The first mayor of the new city was A. Watson Conner. Minimum residential lot size was established at one-quarter acre.

Meanwhile, in unincorporated Los Altos Hills, residents were becoming concerned by the zoning decisions of county planning commissioners and supervisors that threatened their treasured rural atmosphere and one acre minimum residential zoning. Homeowner associations banded together to fight for incorporation and the Town of Los Altos Hills became official on January 27, 1956.

Arthur E. Fowle, automatically designated mayor as the highest vote getter among the city council candidates had to step down from the council because of ill health. His son, John M. Fowle, was appointed to fill his seat and Sidney Treat was then chosen as the first mayor of Los Altos Hills. The council voted to retain the minimum one acre lot size.