The locale is associated with the discoveries of Francisco Cantua, while the core landholding of 160 acres (0.65 km2) was purchased in 1866 by early settlers George W. Roop and William F. Olden.

In the last decade of the 19th century, further development took place: The 1890 bathhouse noted above, several 1890s board and batten guest cabins and a wooden kiosk above one of the hot springs.

Notable guests to this historic destination hotel in the Victorian period included San Francisco Mayor James Phelan, gold mining magnate Adolph Sutro, Claus Spreckels and singer Margaret Alverson Blake.

Automobile use was rising dramatically in this era, so that a frenzy of tree cutting occurred in the early 1920s all along Gilroy Hot Springs Road to accommodate the burgeoning auto arrivals.

By 1934, the Gilroy Hot Springs Post Office was closed, and in 1935, the Southern Pacific Railroad ended its auto stage service to the resort.

After the bombing of Pearl Harbor, Sakata and the considerable Japanese American population of Santa Clara County were imprisoned in Internment Camps.

The sleeping annex was demolished in 1946, and in 1964 Sakata could not afford to meet the requirements of county building inspectors regarding new code for cabin heating systems.

Fukuyama then launched plans for rehabilitation of the property as a Japanese American cultural and recreation center and secured its standing as a California Historical Landmark.

Although it is currently closed to the public until a management plan is implemented, many of the structures have fallen victim to vandalism and the ravages of time and weather[citation needed].