The prospect for coal was the primary reason for the founding of Clayton. W.K. Taylor surveyed the site in 1858. The first house erected on the present site of the town was built in 1857 by Romero Mauvais, who erected a building and opened a tavern. This latter became the site of the Clayton Hotel.
In 1858 George Chapman erected a hotel adjoining, and in 1858, James Curry opened a livery stable. In 1858 Charles Rhine moved his business from a point two miles distant, where he had started a store in 1856, into the town. A. Senderman opened a general merchandise store next to the Chapman Hotel building that same year.
In 1857, a religious congregation was organized by a Presbyterian preacher in the home of Howard Nichols; this organization was later merged with a Congregational Church, organized on February 1, 1863, by Rev. J.J. Powell. On November 10, 1867, a church was dedicated by Rev. James W. Brian.
On February 28, 1864, the town was nearly wiped out by a disastrous fire.
Some of the early settlers of Clayton and the vicinity were; Captain Howard Nichols, J.D. Allen, William Taynton, Milton Shepard, D. Fisher, Adolph Zophy, G.O. Chapman (who had crossed the plain with Fremont in 1846, and who died in 1920), Henry Polly, Isaac Mitchell, C. Ryan, John Collins, Duncans, Donners, Stranahans, Kirkwoods, Myricks and Cowdles. C.E. Westmore (who was the first justice of the peace) and William Morris also filled that position in 1862.
When copper was discovered in Clayton, the town was at its height of prosperity up to that point.
Mail was delivered on horseback to the “Coal Mines Area” by Frank Leslie “Doug” Mitchell of Clayton and in the 1890′s before daily stages linking Martinez, Pacheco, Concord, Clayton, Antioch and the “Mines” began operating from the Atchinson Ranch on Clayton Road in 1889. Jack and George Atchinson, brothers, had horse drawn wagon stages built with large wheels to navigate bad roads in the rainy seasons. They carried passengers, money and freight, as well as the regular mail. Drivers were armed with .45 colt revolvers and required by the U.S. Mail contract regulations.
Coal production declined near the end of the century when less expensive and higher quality coal became available from other sources, and agriculture (cattle and dairy ranching, hay and grain production, orchard, vineyard and farm produce) became the valley’s economic mainstay. The highest student enrollment ever recorded in the two-room Mt. Diablo School was 111 in 1890, before coal mining ended and as agriculture flourished.
Grain was shipped from Pacheco to markets in San Francisco and Sacramento. In the early 1900′s, cattle were driven through the hills to the river to be loaded on boats for shipment. Clayton’s vineyards produced wines that won state, national and international awards for half a century, until phylloxera infected the grape vines and sale of alcoholic beverages was prohibited in 1919. The almond and walnut orchards replaced the vineyards. Land in the Upper Clayton Valley remained general agricultural until the 1940s.