The town is named for its setting in a bowl-shaped valley which early gold miners thought was caused by a volcano.

The area was first designated by Colonel Stevenson's men, who mined Soldiers Gulch in 1849.

[7] Hydraulic mining operations, begun in 1855, brought thousands of fortune seekers to form a town of 17 hotels, a library, a theater, and courts of quick justice.

The "Volcano Blues" smuggled the 800 lb (360 kg) cannon "Old Abe," into the town by hearse, to intimidate rebel sympathizers.

The cannon was cast by Cyrus Alger & Co. in Boston in 1837 and is the first of two 6-pounders made on the same day to be stamped with serial number 4.

The Confederate faction known as Knights of the Golden Circle owned many of the Main Street businesses.

"Old Abe" was fired down Main Street, causing windows to break in all the shops that had not been warned – the ones sympathetic to the South.

The Union Billiard Saloon and Boarding House opened in 1880 and was also the site of the Volcano Justice Court, presided over by Judge Peter Jonas.

[13] George Madeira established California's first recorded astronomical observatory in 1860 which is where the Great Comet of 1861 was discovered (in the U.S.).

The company conducts a full season each year, performing in both the 1856 Cobblestone Theater and in the larger outdoor Volcano Amphitheater.

Daffodils were first planted in the mid-19th century by landowner Pete Denzer to remind him of Holland, his home country.

In 1877, Arthur McLaughlin and his wife, “Lizzie” van Vorst-McLaughlin bought the property, which is still owned and managed by their descendants.