Lake County was created from Jackson and Wasco Counties on October 24, 1874 by the State Legislature. It then included the present Klamath County and all of the present Lake County except Warner Valley. In 1882 land was removed to create Klamath County, and in 1885 the Warner area from Grant County was added.

Linkville, now Klamath Falls, was the first county seat. M. Bullard gave 20 acres (80,000 m²) as the Lakeview townsite. By the 1875 election a town had been started there and an election moved the county seat to Lakeview. Because of poor transportation connections with the rest of Oregon, the early economic orientation of Lake County was toward California. During the 1840s and 1850s the county was part of the military courier route between The Dalles on the Columbia River and the Presidio in San Francisco. The county did not acquire a railroad connection until the 1890s.