The outpost was originally established as La Misión Santa Clara de Thamien (or Mission Santa Clara de Thamien, a reference to the Tamien people) at the Native American village of So-co-is-u-ka (meaning "Laurelwood", located on the Guadalupe River) on January 12, 1777.

There the Franciscan brothers erected a cross and shelter for worship to bring Christianity to the Ohlone people.

Initially, there was tension between the people of the mission and those in the nearby Pueblo de San Josè over disputed ownership rights of land and water.

The tension was relieved when a road, the Alameda, was built by two hundred Native Americans to link the communities together.

In the same tabular report, its resident priest estimated that 10,000 cattle, 9,500 sheep, 730 horses, 35 mules, and 55 swine were on mission lands, while about 3,000 fanegas of grain (some 220 pounds (100 kg) each of wheat, barley or corn) had been harvested.

[citation needed] After the Mexican secularization act of 1833 most of the mission's land and livestock was sold off by Mexico.

With that change, priests of the Jesuit order took over the Mission Santa Clara de Asís in 1851 from the Franciscans.

King Alphonso XIII donated a replacement bell, which is on display in the de Saisset Museum (in the mission).

A rebuilt and restored Mission Santa Clara was consecrated in 1929, when it assumed its primary modern function as chapel and centerpiece of the university campus.