Oroville is situated on the banks of the Feather River where it flows out of the Sierra Nevada onto the flat floor of the California Central Valley. It was established as the head of navigation on the Feather River to supply gold miners during the California Gold Rush.

The first discoveries of Gold at Oroville were made in the fall of 1849. Then known as Ophir, the first store opened in the winter of 1849-1850 by Alexander G. Simpson and James Law. In 1852, the excitement caused by the finding of gold at White Rock depopulated Ophir, but a large population of Chinese still continued to mine in the bluff below Ophir. The turning point in the history of Oroville was the organization of the FEather River and Ophir Water Company, which was formed to construct a canal to bring water to the dry diggings of Ophir. The canal was completed in 1856 and Oroville's boom was started. In 1856, Oroville was the 5th largest town in the state of California with a population of about 4,000 people.