Once primarily agricultural because of its highly fertile soil, Santa Clara Valley is now largely urbanized, although its far southern reaches south of Gilroy remain agrarian.

Few traces of its agricultural past can still be found, but the Santa Clara Valley American Viticultural Area remains a large wine-making region.

It was one of the first commercial wine-producing regions in California (and possibly the United States), utilizing high-quality French varietal vines imported from France.

The southern portion of the valley is drained southward by Llagas Creek into the Pajaro River, which in turn flows westward to Monterey Bay.

"[12] The summit of the transverse divide is about two miles from the former town of Madrone at an elevation of 345 feet (105 meters), but the alluvial plain is so continuous that most travelers are unaware they are crossing between two drainage basins.

[12] The earliest known inhabitants on the Santa Clara Valley are the Ohlone people, who had eight distinct languages and tribes in the coastal region.

[13][14] Mission Santa Clara de Asís, which had control over a vast tract of land stretching from Palo Alto to Gilroy, was founded by Franciscans in 1777.

Toward the end of the nineteenth century many Italians and other immigrants from Southern and Eastern Europe came to the valley and worked in the orchards and canneries.

The town of San Jose was dominated by its business community, which was in part composed of Irish Catholics, who had a self-contained social life which did not include immigrant labor.

[23] Woody Guthrie's songs were on the radio and he wrote a regular column in the San Francisco-based The Daily People's World for the workers.

During the "March Inland" organizing drive the International Longshore and Warehouse Union (ILWU) backed the Cannery and Agricultural Workers' Industrial Union (CAWIU), a Communist-controlled union headquartered in San Jose, which had considerable success organizing farm and cannery workers in the Santa Clara Valley and elsewhere in California[23] until it was suppressed and its leaders jailed in 1934 by the State of California following sustained attacks by business and political forces which, in San Jose, resulted in an atmosphere of terror (the low point of which was a public lynching tacitly supported by James Rolph, the Governor of California).

[citation needed] Wartime production associated with World War II brought industry to the valley such as building of marine engines for Liberty ships by the Joshua Hendy Iron Works, now Northrop Grumman Marine Systems[26] in Sunnyvale; landing craft were built by Food Machinery Corporation, which later built the M113 armored personnel carrier, the Bradley Fighting Vehicle, and the XR311 at its facility in Santa Clara;[citation needed] and an IBM factory began manufacturing punch cards in San Jose in 1943.

Led by Stanford University, the lower San Francisco Peninsula became a global high-tech hub known as Silicon Valley.

There were critics: Santa Clara County Planning Director Karl Belser, who opposed urban sprawl, commented, "Perhaps the only use we will ever find for the hydrogen bomb will be to erase this great mistake from the face of the earth.

[30] In more recent years, San Jose and the Santa Clara Valley have suffered from extensive droughts in California to the extent that some residents may run out of household water by the summer of 2022.

Similarly, Palo Alto, while in Santa Clara County and considered part of Silicon Valley, is on the San Francisco Peninsula.

[citation needed] The underlying geology of the Santa Cruz Mountains was also formed by the sediment of the ancient seas, where marine shale points to Miocene origin.

[4] During the 19th century, 37,388 metric tons of mercury were extracted from the New Almaden mine south of San Jose and northeast of Santa Cruz.

[34] After intermittent mining operations finally ceased in the 20th century, the area was purchased by Santa Clara County to be used as a park and was designated a National Historic Landmark.

[citation needed] More recently, extensive droughts in California, further complicated by drainage of the local Anderson reservoir for seismic repairs, have strained the Valley's water security.