A hunting people lived in eastern Colorado at least 20,000 years ago, but little is known about them. The Basket Makers, who came to southwestern Colorado after 100 BC, grew corn and squash and lived in pit houses. By AD 800 there were Pueblo tribes who practiced advanced forms of agriculture and pottery making. From the 11th through the 13th centuries (when they migrated southward), the Pueblo Indians constructed elaborate apartment-like dwellings in the cliffs of the Colorado canyons and planted their crops both on the mesa tops and in the surrounding valleys.

In the 1500s, when Spanish conquistadors arrived in the Southwest, northeastern Colorado was dominated by the Cheyenne and Arapaho, allied against the Comanche and Kiowa to the south. These plains-dwellers also warred with the mountain-dwelling Ute Indians, who were divided into the Capote, Moache, and Wiminuche in the southwest; the Yampa, Grand River, and Uintah in the northwest; and the Tabeguache and Uncompahgre along the Gunnison River.

The exact date of the first Spanish entry into the region now called Colorado is undetermined; the explorer Juan de Onate is believed to have traveled into the southeastern area in 1601. More than a century later, in 1706, Juan de Uribarri claimed southeastern Colorado for Spain, joining it with New Mexico. Meanwhile, French traders did little to stake out their claim to the Colorado region, which included most of the area east of the Rocky Mountains. In 1763, France formally ceded the Louisiana Territory to Spain, which returned it to the French in 1801. Two years later, as part of the Louisiana Purchase, Colorado east of the Rockies became US land; the rest of Colorado still belonged to Spain.

Formal boundaries had never been demarcated between the lands of French Louisiana and Spanish New Mexico. In 1806, the US government sent out a group led by Lt. Zebulon M. Pike to explore this southwestern border. Pike's group reached Pueblo on 23 November 1806 and then attempted without success to scale the peak that now bears his name. Not until 1819 did the US and Spain agree to establish the boundary along the Arkansas River and then northward along the Continental Divide. The following year, Maj. Stephen Long explored this new border, and Dr. Edwin James made the first known ascent of Pikes Peak.

Eastern Colorado remained a wilderness for the next few decades, although traders and scouts like Charles and William Bent, Kit Carson, and Jim Bridger did venture into the largely uncharted and inhospitable land, establishing friendly relations with the Indians. It was in 1840 at Bent's Fort, the area's major trading center, that the four major eastern tribes ended their warfare and struck an alliance, a bond that lasted through their later struggle against the white settlers and US government. Between 1842 and 1853, John C. Frémont led five expeditions into the region, the first three for the US government. In 1842, he traveled along the South Platte River; on the next two trips, he crossed the Rockies. In his fourth expedition, he and a few of his party barely survived severe winter conditions. Finally, in 1853, Frémont led an expedition over a route traveled by Capt. John Gunnison earlier that year through the San Luis Valley over Cochetopa Pass and along the Gunnison River. The 1853 trips were made five years after western and southern Colorado had come into US possession through the Mexican War.

The magnet that drew many Americans to Colorado was the greatly exaggerated report of a gold strike in Cherry Creek (present-day Denver) in July 1858. Within a year, thousands of prospectors had crossed the plains to seek their fortune. Many were disappointed and headed back east, but those who stayed benefited from a second strike at North Clear Creek, some 40 mi (64 km) to the west. The subsequent boom led to the founding of such mining towns as Central City, Tarryall, Golden, Blackhawk, Boulder, Nevadaville, Colorado City, and Gold Hill. By 1860, the population exceeded 30,000. A bill to organize a territory called Colorado, along the lines of the state's present-day boundaries, was passed by the US Congress on 28 February 1861. Colorado City, Golden, and Denver served at various times as the territorial capital until 1867 when Denver was selected as the permanent site. Colorado sided with the Union during the Civil War, though some settlers fought for the Confederacy. Union troops from Colorado helped defeat a contingent led by Confederate Gen. Henry H. Sibley at La Glorieta Pass in New Mexico in 1862.

The 1860s also saw the most serious conflict between Indians and white settlers in Colorado history. Cheyenne and Arapaho chiefs had ceded most of their tribal holdings to the US government in 1861. Sent to a reservation in the Arkansas Valley, these nomadic tribes were expected to farm the land. Unsuccessful at farming, the Indians rebelled against the poor rations supplied them by the US government and sought to resume a nomadic lifestyle, hunting buffalo, raiding towns, and attacking travelers along the Overland and Sante Fe trails. Col. John Chivington was placed in charge of controlling the Indian unrest in the summer of 1864 as Territorial Governor John Evans departed for Washington, DC, leaving the situation in the hands of the military. On 29 November of that year, Chivington led his forces to Sand Creek, on the reservation's northeastern border, where they brutally massacred perhaps 200 Indian men, women, and children who thought they were under the protection of US military forces at nearby Ft. Lyon. Five more years of warfare followed, with the Indians finally defeated at Beecher Island (1868) and Summit Spring (1869). By 1874, most Plains Indians were removed to reservations in what is now Oklahoma. After gold and silver were discovered in areas belonging to the Ute in 1873, they too were forced off the land. By 1880, a series of treaties limited the Ute to a small reservation in the barren mesa country.

The first bill to admit Colorado to statehood was vetoed in 1866 by President Andrew Johnson, who at that time was in the midst of an impeachment fight and feared the entry of two more Republicans into the US Senate. Colorado finally entered the Union as the 38th state on 1 August 1876 less than a month after the nation's 100th birthday during the presidency of Ulysses S. Grant.

In the early years of statehood, silver strikes at Leadville and Aspen brought settlers and money into Colorado. Rail lines, smelters, and refineries were built, and large coalfields were opened up. The High Plains attracted new farmers, and another new industry, tourism, emerged. As early as the 1860s, resorts had opened near some of the state's mineral springs. By the mid-1870s, scenic canyons and towns became accessible by train. One of the first major spas, Colorado Springs, recorded 25,000 tourists in 1878, and by the mid-1880s, Denver was accommodating up to 200,000 visitors a year. Colorado's boom years ended with a depression during the early 1890s. Overproduction of silver coupled with the US government's decision to adopt a gold standard in 1893 wiped out the silver market, causing the closing of mines, banks, and some businesses. Coinciding with this economic disaster was a drought that led to the abandonment of many farms. A more positive development was a gold find at Cripple Creek in 1891.

By the dawn of the 20th century, farmers were returning to the land and making better use of it. Immigrants from Germany and Russia began to grow sugar beets in the Colorado, Arkansas, and South Platte river valleys. Huge reclamation projects brought water to semiarid cropland, and dry-land farming techniques also helped increase yields. The development of the automobile and good roads opened up more of the mountain areas, bringing a big boom in tourism by the 1920s.

Following World War I, the agricultural and mining sectors fell into depression. From 1920 to 1940, statewide employment declined, and the population growth rate lagged behind that of the US as a whole. World War II (1939–45) brought military training camps, airfields, and jobs to the state. Colorado also became the site of several major POW camps as well as relocation centers for Japanese Americans (Nisei), especially the northeastern and southeastern areas of the state. After the war, the expansion of federal facilities in Colorado led to new employment opportunities. The placement of both the North American Air Defense Command and the US Air Force Academy in Colorado Springs helped stimulate the growth of defense, federal research, and aerospace-related industries in the state. As these and other industries grew, so too did Colorado's population and income: between 1960 and 1983, the state's population growth rate was more than twice that of the nation as a whole; and between 1970 and 1983, Colorado moved from eighteenth to ninth rank among the states in personal income per capita. The construction of the Air Force Space Operations Center at Colorado Springs, announced in 1983, also contributed Colorado's economic and population growth.

In the 1970s and early 1980s, Colorado experienced a boom in its oil, mining, and electronics industries. Prosperity attracted immigrants from other states, and for about a decade Colorado's population increased at an average of 3% a year. The economy began to shrink, however, in the mid-1980s with the drop in oil prices and the closing of mines, culminating in a full-scale recession by 1987. The economy rebounded by the early 1990s, spurred by an educated workforce and the low cost of doing business in the state. Industry in the state became more diverse, now including oil and gas, telecommunications, retail, and, very importantly, high technology. In 1998 the state ranked ninth nationally in per capita personal income, and by 1999 its unemployment rate, just 2.9%, was among the lowest in the country. Due to the 2001 economic recession in the United States and its aftermath, the Colorado unemployment rate stood at 5.8% in May 2003, below the national average of 6.1% but still causing difficulties for the Colorado economy.

On 20 April 1999, the affluent Denver suburb of Littleton made headlines around the world after two teenaged gunmen entered Columbine High School and went on a shooting rampage, killing 12 students and one teacher before turning their guns on themselves. Several others were injured. The tragic event escalated the national debate on gun control and reopened the discussion about what effect media violence has on the nation's youth.

Major challenges facing Colorado in the 1990s and into the 2000s included industrial pollution of its air and water, overcrowding on the Rockies eastern slope (home to four-fifths of its population), and water shortages. By spring 2000 one issue emerged that encompassed many of the problems Coloradans faced: the practice of open-pit gold mining. Gaping holes, forged by explosives and chemicals, had been created by mining companies across western states since 1980. According to environmentalists and other concerned citizens, the cost-efficient method for extracting the precious metal from stone had come at a price: cyanide, used to dissolve gold in the mines, leached into streams and rivers; and mishaps occurred, including the accidental cyanide release that contaminated 17 mi (27 km) of Colorado's Alamosa River in the early 1990s, the costliest mining disaster in US history. Banning open-pit mining had gained wide public support in the months preceding the 2000 election, when organizers hoped to place the initiative on the ballot. Although about 72% of Colorado voters were thought to be in agreement with the ban, the initiative failed to make the ballot in November 2000.

Colorado was among the western states ravaged by wildfires the summer of 2000, the worst fire season since 1988. In 2001, 2002 and 2003, wildfires broke out in the west once again. In the summer of 2002, wildfires burned over 7.1 million acres of public and private land. Twelve western states, including Colorado, were the victims of severe wildfires that burned 2.7 million acres as of September 2003.