European-Americans first settled Nevada City in 1849, during the California Gold Rush, as Nevada (Spanish for "snow-covered", a reference to the snow-topped mountains in the area). The Gold Tunnel on the north side of Deer Creek was the city's first mine, built in 1850. The first sawmill in Nevada City was built on Deer Creek, just above town, in August 1850, by Lewis & Son, with a water wheel. In 1850–51, Nevada City was the state's most important mining town, and Nevada County the state's leading gold-mining county. In 1851, The Nevada Journal became the first newspaper published in the town and county. The first cemetery in town, the Pioneer Cemetery, was founded around 1851 behind the Nevada City United Methodist Church, Nevada County's first denominational church.

The town of Nevada was incorporated on April 19, 1856. In 1864, the word “City” was added to its name to relieve confusion with the nearby state of Nevada, and the town has legally been known as Nevada City ever since. The former town of Coyoteville later became Nevada City's northwestern section.
What is Nevada City known for?
Nevada City is a town in Northern California that was famous during the California Gold Rush that was first settled in 1849.