Cloverdale began as an early stagecoach stop, known as Markleville, on the Rancho Rincon de Musalacon Mexican grant.

Miller bought 759 acres (3.1 km2), which included the present site of the town, from Johnson Horrell.

By 1878, the railroad service provided three trains a day between Cloverdale and Ferries of San Francisco Bay.

[5] In 1881, Jules Leroux and Armand Dehay established a colony south of Cloverdale named "Icaria Speranza", based on the French Utopian movement, the Icarians.

[6] The San Francisco Chronicle Wine Competition is run by the Cloverdale Citrus Fair.

[7] Cloverdale suffered severe economic hardship, losing 500 to 600 manufacturing jobs between 1988 and 1994, with the closing of a fire equipment factory and the shrinking of the logging industry.

On July 6, 2005, Cloverdale began its economic reform with the "RTB" (Real-Estate Transfer Bureau) plan granting money for businesses and commerce to return to the city.

Some businesses closed, and many natives believed the bypass radically changed the town's character.

[9] Since the bypass, signs of civic revival have occurred with the development of pedestrian-friendly sidewalks, a performing arts center, a brewpub, and a downtown plaza hosting live concerts and a farmers' market.

[10] The Cloverdale Rancheria of Pomo Indians is a landless federally recognized tribe with a membership of almost 500.

Elsie Allen, considered to be one of the best California basketweavers of her generation, was a member of the Rancheria and spent part of her childhood there.

According to tribal history, the Pomo people lived peacefully in the area since ancient times.

In 1979, Tillie Hardwick, a Pomo woman, filed a class action suit on behalf of 16 of the illegally terminated rancherias.

In 1983, the Courts reinstated the federal recognition of the illegally terminated tribes, including the Cloverdale Rancheria.

In 1994, the Highway 101 bypass cut through the Rancheria land, forcing tribal landowners to sell their property for the freeway.

[11] Temperatures in Cloverdale can exceed 100 °F (38 °C) and it is known for having hot, dry summers relative to the rest of Sonoma County.

Plans to extend Sonoma–Marin Area Rail Transit (SMART), a commuter rail service in Sonoma and Marin counties, from its current northern terminus in Santa Rosa to Cloverdale will link the town to a bay ferry terminal in Larkspur.