The town was first settled in 1849 reportedly by settlers from Missouri though no historical records have survived which confirm this.

[7]: 5  The earliest settlement was largely populated by transient miners living in tents or wooden sheds, though Fiddletown grew rapidly in 1852 when gold was discovered in the dry riverbeds of the surrounding area.

A 22-mile canal was completed in 1853 which diverted the Cosumnes River and brought water to these riverbeds so that miners could pan for gold.

[7]: 9  This water source also supplied irrigation for local agriculture which further spurred the establishment of a permanent town.

The first church was completed in 1853, and that same year the United States Postal Service opened a Fiddletown post office.

One of the earliest was a division of the Sons of Temperance, founded to combat alcoholism and what one then-resident referred to as the "desecrating hand of vice [which] steals upon our citizens in the shape of Chinese and other prostitutes who have been driven from the cities".

[7]: 8  [8] A Jewish Society was formed in 1857 around the same time that a synagogue was established in the now county seat of Jackson, California.

[9] However, one local citizen was embarrassed to be known as the "Man from Fiddletown" and successfully lobbied to have the name changed to Oleta (after his daughter) in 1878.

[14] Federally, Fiddletown is in California's 4th congressional district, represented by Democrat Mike Thompson.