The original inhabitants of Chico were the Mechoopda Maidu.

Chico was founded by General John Bidwell, a member of one of the first wagon trains to reach California in 1843. Bidwell first came to the area in that same year as an employee of John Sutter.

In 1844, Arroyo Chico was granted by California Governor Manuel Micheltorena under Mexican law, to William Dickey.

In two separate purchases in 1849 and 1851, Bidwell acquired the 28,000-acre (110 km²) Rancho del Arroyo Chico. He filed a claim for the land with the US Lands Commission in 1852, and the claim was confirmed the next year. After a subsequent legal challenge, the claim was confirmed by the US District Court for the Northern District in 1855, and eventually by the US Supreme Court. The title patent was signed by President James Buchanan in 1860.

A treaty of "peace and friendship" was signed on September 18, 1853 between the Mechoopda, and other tribes of the area near Bidwell's Ranch; Indians at Reading's Ranch at Colusa; and tribes along the Consumnes and Yuba rivers. United States Indian Agent O. M. Wozencraft represented the U.S. Government at Bidwell's Ranch.

The City of Chico was founded in 1860 by General John Bidwell. That year, Bidwell requested the county send a surveyor to lay out the city street grid.

Chico was the starting point of the Koncow Trail of Tears also called the Nome Cult Trail. On August 28, 1863 all Konkow Maidu were to be at the Bidwell Ranch to be taken to the Round Valley Reservation at Covelo in Mendocino County. Any Indians remaining in the area were to be shot. 435 Maidu were rounded up and marched under guard west out of the Sacramento Valley and through to the Coastal Range. 461 Indians started the trek, 277 finished. They reached Round Valley on September 18, 1863.

The city became incorporated January 8, 1872.

The Butte Flume and Lumber Company built a flume from Butte Meadows down Big Chico Creek in 1872, completing it in 1874. This flume would supply the Diamond Match Company with lumber for its operations.

In 1877, anti-Chinese riots erupted.

In 1892, Chico's Founder, John Bidwell, was the Prohibition Party candidate for President of the United States. The Bidwell/Cranfill ticket received 271,058 votes, or 2.3% nationwide. It was the largest total vote and highest percentage of the vote received by any Prohibition Party national ticket. The Madison Bear Garden at Second and Salem Streets was the Prohibition party headquarters. Several streets in Chico are named after prominent prohibitionists such as Neal Dow Avenue, West and East Frances Willard Streets, and Tom Polk Avenue.

In 1887, the California legislature established the Northern Branch of the State Normal School of California. Chico was chosen as its site, and Bidwell donated land from his cherry orchard for this purpose. This school would come to be called the Chico Normal School, Chico State College, and finally California State University, Chico.

Chico was the northern terminus of the Sacramento Northern Railroad, an electrified railway which extended south to Sacramento and Oakland in the San Francisco Bay Area.

On July 10, 1905, Annie Bidwell signed a grant deed donating 1,902 acres (7.70 km²) to the people of Chico for a public park. These initial acres were expanded upon several times over the years, resulting in the creation of Bidwell Park, one of the largest municipal parks in the nation.

In 1917, the first parade that would later come to be called the Pioneer Day Parade was held on the downtown streets as a celebration of Senior Day. This tradition would continue as a celebration of local heritage under various names on the first Saturday in May each year until 1990.

Scenes for Warner Brothers' Technicolor productions of The Adventures of Robin Hood (1938) with Errol Flynn, Olivia de Havilland, and Basil Rathbone, and Gone with the Wind (1939) were filmed in the Chico area, primarily in Bidwell Park.

During WWII the Chico Army Air Field was used to train fighter and bomber pilots. It was also home of the 555th Parachute Infantry Battalion, and a Titan-I ICBM launch site was active at the north end of the field from 1962-1965.

In the late fifties and early sixties, the city wrestled with the controversial issue of creating a bypass for Highway 99 through Bidwell Park. The viaduct was built 1963-65.

On April 22, 1970, students celebrating the first Earth Day on the Chico State campus pushed a car into West First Street (which was then Highway 32) blocking traffic. The street was closed temporarily for safety. The incident escalated into a demonstration that lasted into the night. The protesters were arrested on conspiracy charges which were later dropped. The street re-opened the next day, however it was permanently closed over the segment running through campus later that year.

On July 21, 1982, the Butte County Board of Supervisors approved an amendment to the 1979 Butte County Land Use Element of the Butte County General Plan with the purpose of preserving agricultural land. This amendment established a "Green Line" on the west side of Chico beyond which urban development would be restricted. This line is responsible for the continued existence of working orchards relatively close to the core of the growing city.

In 1987 Playboy Magazine named Chico State the "Number One Party School" in the nation. University President Robin Wilson met with city officials including City Manager Fred Davis, and Police Chief, John Bullerjahn with the goal of ending the reputation by ending the parties directly with police force. On April 25, 1987 police riots broke out during the Pioneer Days celebration. President Wilson announced an end to the 70 year old tradition saying, he took Pioneer Days "out back and shot it in the head." The tradition was revived in 1996 and has continued to this day.

In 1996, the Olympic Torch arrived in Chico at the Amtrak station. The torch was carried through the closed streets with thousands of Chicoans celebrating along the path.

In 1996, the recently re-elected council member Ted Hubert died prior to being re-sworn in, and more significantly, before the selection of mayor had occurred. The evenly, and deeply divided council stalemated on the selection. This resulted in a rotating Mayor Pro Tempore system for about six months. The remaining six council members each took turns serving as meeting chair until they appointed Bill Johnston to fill the council vacancy, and Rick Keene mayor.

In 1999, the tower supporting the illuminated Diamond on top of the Senator Theatre at Fifth and Main was discovered to be leaning. It was determined to be at risk of collapse, and was removed. The tower was refurbished and put back in place in 2005.

In the years when the Pioneer Days celebration was not held (1990-1996), the Halloween and St. Patrick's Day celebrations grew into much larger events. These holidays had always enjoyed a high rate of participation in Chico, due to its young population. However, with the loss of Pioneer Days, people's energy was redirected so as to make St. Patrick's Day and Halloween look more like Mardi Gras in New Orleans. Mutual aid was invoked by police each year for several years. In 2000 and 2001, the City closed downtown streets to accommodate the thousands of Halloween revelers.

However, in 2002 the streets were no longer closed. The City even conducted a TV ad campaign telling people not to come downtown for Halloween. In response to the incidence of thrown bottles, and broken glass, the City Council has established a "Glass Free Zone" largely contiguous with the downtown and the South Campus Neighborhood. The Council activates the "Glass Free Zone" every Halloween and St. Patrick's Day and from time to time at the request of the police when they believe there will be a large gathering of revelers. Most recently, César Chávez Day was added to the growing list of holidays requiring such a response.

In 2003, a branch from one of the majestic Siberian Elm trees planted in 1873 by John Bidwell in City Plaza fell and hit a person sitting on a bench. The incident prompted the removal of the trees, some of which had rotting roots. The city embarked on a renovation of City Plaza in 2005, and in November 2006, the newly renovated Chico City Plaza was re-opened.

On September 4, 2007 a city ordinance to curtail public assembly and parties which might have the potential to become "disorderly events" was proposed, in an effort to prevent them. It was adopted November 6, 2007.  WE LOVE YOU JILL THANK YOU :)