Missoula has been a major commercial center in western Montana since it was founded in 1860 at a historically strategic point near the head of five valley systems: The Hellgate and Blackfoot Valleys to the East, the Missoula Valley to the West, the Flathead-Jocko Valley to the North, and the Bitterroot Valley to the South.

Captain C.P. Higgins and Francis L. Worden, a Walla Walla merchant, established the first settlement in the Missoula area in 1860 at the Hellgate Trading Post located about four miles west of the existing townsite. It and Missoula Mills, established in 1864 at the present townsite, were built on Mullan Road (which joined the Upper Missouri River at Fort Benton with the Upper Columbia River near Walla Walla) to trade with the Indians, with those traveling to region’s mines, and with the ranchers and farmers who began to settle in the adjoining valleys.

The Indian scare of 1877 led to the construction of Fort Missoula southwest of Missoula, which became a source of economic stability for the town between the end of the placer mining era and the coming of the railroad. The Bonner, Hammond and Eddy Company (later the Missoula Mercantile) established in 1866, began to dominate the wholesale and retail trade of the region by the 1880’s and made Missoula the largest trade center within a 75-mile radius.

The construction of the Northern Pacific Railroad through Missoula in 1883, converted it from a town of 300 to a city of 12,000 in 1920, with an economy based on trade, timber, and agriculture.

In 1886, A.B. Hammond built what was reputed to have been the world’s largest lumber mill at Bonner, seven miles east of Missoula. The mill produced timbers for railroad structures, the Butte-area mines, and lumber for building construction. Agriculture attracted thousands to the area in the early 1900’s with the opening of the Flathead Indian Reservation, the promotion of homesteading, and the construction of the Chicago, Milwaukee, St. Paul and Pacific Railroad through Missoula.

Large irrigation projects were constructed in the Bitterroot and Flathead Valleys, which became famous for their orchards.

Missoula also became the center of local, state, and federal government - the county seat in 1860, the location of the state university in 1895, and the USDA Forest Service District Headquarters in 1908. New Deal projects, such as the construction of university buildings and several city improvements, contributed significantly to the stabilization of the city’s economy during the 1930’s.