The organic legislative act creating the slave-free Territory of Colorado was passed by the United States Congress and signed by 15th President James Buchanan (1791-1868, served 1857-1861), into law on February 28, 1861.

Statehood was regarded as fairly imminent with the expected growth in the constantly westward moving population, but the local territorial ambitions for full statehood were thwarted at the end of the war in 1865 by a constitutional veto by newly sworn in 17th President Andrew Johnson (1808-1875, served 1865-1869), who was a War Democrat who succeeded to the office after briefly only serving one month as Vice President after Lincoln's assassination that April.

population especially around the capital of Salt Lake City, was strongly controlled by the Ute and Shoshoni native tribes The Eastern Plains were held much more loosely by the intermixed Cheyenne and Arapaho, as well as by the Pawnee, Comanche and Kiowa.

The land that eventually became the Colorado Territory fell under the jurisdiction of the United States in three separate stages: the Louisiana Purchase in 1803 (as adjusted by the 1819 Adams–Onis Treaty), then the Annexation of Texas in 1845, and finally the Mexican Cession in 1848.

In 1779, Governor de Anza of New Mexico fought and defeated the Comanches under Cuerno Verde on the Eastern Slope of Colorado, probably south of Pueblo.

In 1858, Green Russell and a party of Georgians, having heard the story of the gold in the South Platte from Cherokee after they returned from California, set out to mine the area they described.

At Bent's Fort along the Arkansas River, Russell told William Larimer, Jr., a Kansas land speculator, about the placer gold they had found.

Larimer's plan to promote his new town worked almost immediately, and by spring 1859 the western Kansas Territory along the South Platte was swarming with miners digging in river bottoms in what became known as the Colorado Gold Rush.

Early arrivals moved upstream into the mountains quickly, seeking the lode source of the placer gold, and founded mining camps at Black Hawk and Central City.

The movement was promoted by William Byers, publisher of the Rocky Mountain News, and by Larimer, who aspired to be the first territorial governor.

Although seemingly stationed at the periphery of the war theaters, the Colorado regiments found themselves in a crucial position in 1862 after the Confederate invasion of the New Mexico Territory by General Henry Sibley and a force of Texans.

Sibley's New Mexico campaign was intended as a prelude to an invasion of the Colorado Territory northward to Fort Laramie, cutting the supply lines between California and the rest of the Union.

By the 1860s, as a result of the Colorado Gold Rush and homesteaders encroaching westward into Indian terrain, relations between U.S. and the Native American people deteriorated.

On February 18, 1861, in the Treaty of Fort Wise, several chiefs of Cheyenne and Arapaho supposedly agreed with U.S. representatives to cede most of the lands, ten years earlier designated to their tribes, for white settlement, keeping only a fragment of the original reserve, located between Arkansas River and Sand Creek.

This Sand Creek Massacre or 'Massacre of Cheyenne Indians' led to official hearings[5] by the United States Congress Joint Committee on the Conduct of the War in March and April 1865.

After the hearings, the Congress Joint Committee in their report on May 4, 1865, described the actions of Colonel John Chivington and his Volunteers as "foul, dastardly, brutal, cowardly" and: It is difficult to believe that beings in the form of men, and disgracing the uniform of United States soldiers and officers, could commit or countenance the commission of such acts of cruelty and barbarity as are detailed in the testimony, but which your committee will not specify in their report.Nevertheless, justice was never served on those responsible for the massacre; and nonetheless, the continuation of this Colorado War led to expulsion of the last Arapaho, Cheyenne, Kiowa and Comanche from the Colorado Territory into Oklahoma.

Following the end of the American Civil War, a movement was made for statehood; the United States Congress passed the Admission Act for the territory in late 1865, but it was vetoed by President Andrew Johnson.

By the late 1860s, many in Denver had sold their businesses and moved northward to the Dakota Territory communities of Laramie and Cheyenne, which had sprung up along the transcontinental railroad.