[2] The headwaters of Cottonwood Creek originates as North, Middle, and South Forks and numerous smaller tributaries along the north-western rim of the Sacramento Valley.

[4] The main stem is relatively short, only about 25 miles (40 km) long, and flows almost due east for its entire course, through a wide valley in the foothills.

The watershed is divided into two main vegetation zones, with the foothills consisting mostly of chaparral, blue oak woodland and annual grasses, and the mountains comprising mixed-conifer forests, especially Douglas fir and gray pine.

The upper section of the watershed includes significant stands of timber that support a modest logging industry, as well as large tracts of federal National Forest land.

[6] Before the area was settled and cultivated, it was mainly wetlands and frequently inundated by flooding, both from Cottonwood Creek itself and from back waters of the Sacramento River.

The Cottonwood, Trinity and Eel watersheds meet at the triple point at Skylight Ridge, about a mile south of North Yolla Bolly Mountain.

[5] The vast majority occurs between December and April, with the result that the "creek" is often a large river during the winter and spring, while dwindling to a relative trickle in the summer and fall.

Reading, who eventually settled at a point north of the junction of Cottonwood Creek and the Sacramento River, is considered the first non-Native American settler in the area.

The first permanent American settlement on Cottonwood Creek was established in 1849 or possibly earlier, as a trading post for miners headed to the diggings in the northern Sacramento Valley.

The original settlement, the oldest in the Shasta County area, was on the south side of the creek, but eventually development spread to the north, where the town of Cottonwood sits today.

[9] In 1851, the Wintu signed the Treaty of Cottonwood Creek, in which they ceded most of their original territory to the United States Government in exchange for reservation lands along the Sacramento River.

As a result, the treaty and others like it were never ratified, and native peoples were gradually driven off their lands by the increasing number of miners and settlers in the region.

[10] Although Cottonwood Creek was never the location of major gold strikes, the area was prospected and some hydraulic mining schemes did operate in the basin for a limited period.

The area provides habitat for ring-tailed cat, river otters and beavers, and many bird species, including Swainson's hawks and bald eagles.

[13] The Cottonwood and several of its perennial tributaries provide 130 miles (210 km) of spawning habitat for spring and fall run Chinook salmon and steelhead (rainbow trout).

Due to gold mining in the 19th century, and extensive use of the watershed for logging and ranching since then, the creek has experienced sedimentation, which is detrimental to these anadromous fish populations.

[15] State and federal agencies have collaborated on watershed restoration work, including the removal of man-made barriers to fish migration, decommissioning of old logging roads and installation of culverts to reduce erosion.

[16] In September 2014, the Hammer Dam on the South Fork of Cottonwood Creek was removed, opening up 5 miles (8.0 km) of habitat for spring-run Chinook and steelhead.