Settlement of the county began in earnest in the 1870s, with the timber, gold, agriculture, and railroad industries bringing most of the settlers into the area. The county was a crossroads for the Lassen Applegate Trail which brought settlers north from Nevada to the Oregon Trail and south to trails leading into California's central valley. Early settlers included the Dorris, Belli, Essex, Scherer, Trumbo, Flournoy, and Campbell families.

Several thousand acres just south of Newell served as the temporary exile for thousands of Japanese-American citizens during World War II at the Tule Lake War Relocation Center, a Japanese American internment camp. A historical marker still stands along California State Route 139 in Newell. Tule Lake was the largest of the "segregation camps." On November 8, 2005 Senator Dianne Feinstein called for the camp to be designated a National Historic Landmark.