Before American settlement, Ferndale was a glade of giant ferns reaching more than six feet (1.8 m), surrounded by alder, willow, Sitka spruce, Douglas fir, coast redwood, swampy land, and windswept prairies.

[9]: 18  In September 1852, they cleared a five-acre area of ferns and began building a cabin near the base of the Wildcat Road even though Allard was sick with ague.

[9]: 18  By January 1853, twelve men were living in the Shaws' cabin including Seth Kinman, who provided the group with meat, and Joseph Russ.

About this time, Stephen Shaw painted the portrait of Wiyot elder Kiwelattah (or Ki-we-lah-tah)[12] and kept a detailed journal of two years of trying to grow plants in cold coastal fog.

[9]: 46 Other small towns were established around Ferndale, including Centerville, Port Kenyon, Waddington, Grizzly Bluff, and Arlynda Corners.

[9] While the earliest settlers were English speaking from Great Britain, New England, Canada, or Ireland, waves of immigrants arrived in Ferndale from Denmark, Switzerland, Germany, Italy, Portugal, and China.

A later influx of Romansh Swiss included the ancestors of College Football Hall of Fame coach Len Casanova.

[9] Chinese immigrants arrived in California in the earliest gold-rush days, and were settled in all parts of Humboldt County almost as soon as English-speaking whites.

[19] They worked in gold mining on the Klamath and Trinity Rivers, before settling mostly in Eureka, with a few in outlying towns like Ferndale where two Chinese owned clothes washing businesses.

[19] Following a heated meeting at Roberts Hall in Ferndale between local residents and an upset delegation from Eureka, the company guaranteed the workers would come nowhere near town and they were allowed to stay until the fishing season was over in December.

[19] In 1906 Eureka and Fortuna citizens were again up in arms at Ferndale's violation of the unwritten law of the county when the Starbuck–Talent Canning Company of Port Kenyon brought in 23 Chinese and four Japanese to work at the cannery.

[19] After threats of mass action, the Chinese were taken to an old cookhouse on Indian Island from which all whites were barred and where they were held until they left by sea.

[23] The Ferndale Enterprise newspaper was founded on May 11, 1878, by three sons of the local Methodist minister and has published continuously since then, while moving offices and shifting from semi-weekly to weekly publication.

[9][24] Ferndale incorporated with a vote of 89 in favor and 47 against on August 17, 1893, primarily to organize drainage and prevent dogs and other animals from running loose, according to the earliest ordinances enacted.

[9] Modern equipment arrived in 1905 with a motorized pumper engine, in 1917 with a Model T truck with chemical tanks and in 1948 the Hook and Ladder Company formed.

Directly to the south of Ferndale is the Lost Coast region, whose geology and terrain has made it difficult to establish routes through the area.

Ferndale's location near the Mendocino triple junction, a subduction fault associated with the offshore interaction of the Pacific, North American, and Gorda tectonic plates, makes it extremely susceptible to earthquakes.

With a magnitude of 7.0, and having an epicenter of only 62 miles (100 km) southwest of Ferndale, the earthquake was felt in the city and the rest of Humboldt County.

[41] Ferndale receives most of its roughly 40 inches (1,000 mm) of rain from November to May, with lesser amounts in the summer months.

On July 18, 2013, the California Employment Development Department identified Ferndale as having the second lowest unemployment rate (1.7%) of all cities in the state, led only by Carmel-by-the-Sea.

[52] Ferndale, sometimes also referred to as "Cream City", is known for well-preserve Victorian storefronts on Main Street and homes throughout the community, which are also known as "Butterfat Palaces," due to their construction wherein considerable wealth was generated in the dairy industry.

[55] Every year since 1934 in early December, local volunteer firefighters climb and light one of America's tallest living Christmas trees, an approximately 150-foot (46 m) spruce, during a celebration of song held at Fireman's Park.

[62] The triangular park was filled with material graded from the southern end of Main Street, and a Clubhouse (now City Hall) was finished in 1931.

Firemen's Park at the southernmost end of town between Francis and Berding Streets is bordered on three sides by houses and to the south by restricted watershed property.

[64] Several hiking trails cross the mature forest in the 105-acre (42 ha) park donated to the city by Zipporah Patrick Russ on October 31, 1920.

[69] Ferndale was incorporated in 1893 and is governed by a four-member City Council and a Mayor, all of whom serve four-year terms chosen in the general election of even-numbered years.

[66] The Del Oro Water Company finished the Ferndale Mainline Replacement Project in 2011 which included larger pipes and new valves to reduce the number of customers affected during line repairs.

[93] On May 15, 2003, the Regional Water Board (RWB) placed a Cease and Desist order on Ferndale due to discharges of treated wastewater which exceeded one percent of the flow of Francis Creek / Salt River stream system.

[121] Many of Ferndale's buildings have been recreated at the Legoland California theme park, as the only American small town to be represented alongside New York, San Francisco, Las Vegas and other nationally known locations.

In 1995, Legoland staff took hundreds of photos in Ferndale, and used over one million Lego bricks to recreate the town in the Miniland section of the park.