Before the arrival of the Spanish, the area around San Jose was inhabited by the Tamien nation of the Ohlonepeoples of California. San Jose was founded on November 29, 1777, as the Pueblo de San José de Guadalupe, the first city founded in the Californias. It then became a part of Mexico in 1821 after the Mexican War of Independence. Following the American Conquest of California during the Mexican–American War, the territory was ceded to the United States in 1848. After California achieved statehood two years later, San Jose became the state's first capital. Following World War II, San Jose experienced an economic boom, with a rapid population growth and aggressive annexation of nearby cities and communities carried out in the 1950s and 1960s. The rapid growth of the high-technology and electronics industries further accelerated the transition from an agricultural center to an urbanized metropolitan area. Results of the 1990 U.S. Census indicated that San Jose had officially surpassed San Francisco as the most populous city in Northern California. By the 1990s, San Jose and the rest of Silicon Valley had become the global center for the high tech and internet industries, making it California's fastest-growing economy.
In 1835, San Jose's population of approximately 700 people included 40 foreigners, primarily Americans and Englishmen. By 1845, the population of the pueblo had increased to 900, primarily due to American immigration. Foreign settlement in San Jose and California was rapidly changing Californian society, bringing expanding economic opportunities and foreign culture.
In the period 1900 through 1910, San Jose served as a center for pioneering invention, innovation, and impact in both lighter-than-air and heavier-than-air flight. These activities were led principally by John Montgomery and his peers. The City of San Jose has established Montgomery Park, a Monument at San Felipe and Yerba Buena Roads, and John J. Montgomery Elementary School in his honor. During this period, San Jose also became a center of innovation for the mechanization/industrialization of agricultural and food processing equipment.
Though not affected as severely as San Francisco, San Jose also suffered significant damage from the 1906 San Francisco earthquake. Over 100 people died at the Agnews Asylum (later Agnews State Hospital) after its walls and roof collapsed, and San Jose High School's three-story stone-and-brick building was also destroyed. The period during World War II was a tumultuous time. Japanese Americans primarily from Japantown were sent to internment camps, including the future mayor Norman Mineta. Following the Los Angeles zoot suit riots, anti-Mexican violence took place during the summer of 1943. In 1940, the Census Bureau reported San Jose's population as 98% white.
IBM established its West Coast headquarters in San Jose in 1943 and opened a downtown research and development facility in 1952. Both would prove to be harbingers for the economy of San Jose, as Reynold Johnson and his team would later invent RAMAC, as well as the hard disk drive, and the technological side of San Jose's economy grew.
The 1928 San Jose annual Fiesta de las Rosas parade in Downtown
On April 3, 1979, the San Jose City Council adopted San José, with the diacritical mark on the "e", as the spelling of the city name on the city seal, official stationery, office titles and department names. Also, by city council convention, this spelling of San José is used when the name is stated in mixed upper- and lower-case letters, but not when the name is stated only in upper-case letters. The accent reflects the Spanish version of the name, and the dropping of accents in all-capital writing was typical in Spanish. While San José is commonly spelled both with and without the acute accent over the "e", the city's official guidelines indicate that it should be spelled with the accent most of the time and sets forth narrow exceptions, such as when the spelling is in URLs, when the name appears in all-capital letters, when the name is used on social media sites where the diacritical mark does not render properly, and where San Jose is part of the proper name of another organization or business, such as San Jose Silicon Valley Chamber of Commerce, that has chosen not to use the accent-marked name. The city's name without the accent can still be found in its 1965 Charter document, as amended, which formally chartered the municipality as City of San Jose. Similarly, the city's website appears to use a mixture of both; for example, the "City of San José" in the text uses the mark but the "City of San Jose" logo image does not.
San Jose's position in Silicon Valley triggered further economic and population growth. Results from the 1990 U.S. Census indicated that San Jose surpassed San Francisco as the most populous city in the Bay Area for the first time. This growth led to the highest housing-cost increase in the nation, 936% between 1976 and 2001. Efforts to increase density continued into the 1990s when an update of the 1974 urban plan kept the urban growth boundaries intact and voters rejected a ballot measure to ease development restrictions in the foothills. Sixty percent of the housing built in San Jose since 1980 and over three-quarters of the housing built since 2000 have been multifamily structures, reflecting a political propensity toward Smart Growth planning principles.