[5] Founded at the confluence of Fountain and Camp creeks on August 13, 1859, it was the first Pikes Peak region settlement.

[8][9] The founders— Melancthon Beach, Anthony Bott, George Bute, and Rufus Cable[10]—envisioned Colorado City as a major supply hub for the new gold mines in South Park and the Blue River, where major strikes in the Pike's Peak Gold Rush had recently been made.

[5] The location for the town was selected for its proximity to Ute Pass, the route westward to the gold mines.

[11] Until August 14, 1862 (including one legislative session), the city was the Colorado Territory capital until it was moved to Golden.

Its primary interest was as a "watering hole", due to its many saloons on the south side of Colorado Avenue.

[11] In addition to saloons and brothels, Colorado City had opium dens in its early days.

[15][16][17] In 1896 and until 1916, ordinances were passed that prohibited prostitution, opium dens, and dance halls, but brothels continued to be established after 1896.

The mayor of the town had warned prostitutes to leave Colorado City by 1908 or 1909, when most of the red-light district was burned down in two separate fires.

[18] In 1933, at the end of Prohibition, Colorado Springs lifted the ban of the sale and consumption of alcohol.

Banks, restaurants, rooming houses, offices, meeting halls and other supporting commercial establishments were built along the north side of Colorado Avenue between Court and 26th Street.

[11] Eventually Colorado City was processing much of the gold ore mined at Cripple Creek.

[14][29] In the 1910s, a reduction in demand for the railroad and ore processing mills depressed Colorado City's economy.

[15] Since the mid-1970s, Old Colorado City had been part of private and public revitalization efforts, including capturing the historical character of its buildings, burying utility wires, and landscaping.

Buildings have been painted colors used around the turn of the 20th century, modern signs have been replaced or removed, and architectural details have been exposed.

[3] Special attractions include Simpich Showcase and Magic Town at The Michael Garman Museum and Gallery.