In 1848, a spring in this area was a popular stopping point between Drytown and Mokelumne Hill, and the number of bottles left behind gave rise to its first name: Bottilleas (a corruption of botellas, Spanish for 'bottles'). As gold was found a camp developed around the spring, in 1849 taking the name Jackson Creek, then just Jackson. Its location helped it grow not only as a mining settlement, but also as a major supply and shipping point between the Southern mines and Sacramento. By 1850, it was estimated that as many as 1500 lived at Jackson.

In 1851, Jackson's continued growth was assured when stage service was established, the post office opened, and the town was chosen as the seat of Calaveras County, though it lost this distinction to Mokelumne Hill the following year. In 1853, Jackson was incorporated as a town, and in 1854 it was selected as the seat of newly-created Amador County. Even though it was struck by a major conflagration in 1855, Jackson quickly rebuilt and continued to boom. The next year, Irish immigrant Andrew Kennedy uncovered a vein of gold-bearing quartz north of town; the Kennedy mine would become one of the richest ever worked in Gold Country.

On August 23, 1862, Jackson was almost obliterated by its largest fire. Hot ashes, carelessly dumped outside a wooden building, in less than three hours time led to the destruction of all except a few brick buildings and outlying homes. Nevertheless, as gold was still pouring in from the surrounding mines, the town was able to again rebuild.

Jackson continued to thrive into the 20th century, due in large part to the Kennedy mine and its neighbor, the Argonaut. Unfortunately, the Argonaut seemed to be plagued by disaster. In spring 1919, a fire broke out on the 4000-foot level of the mine. It was seemingly handled quickly and work continued, but almost a year later flames were discovered at the Kennedy's 3000-foot level, thought to have slowly burned through old workings from the Argonaut. The mines were flooded to extinguish the fire, and work was stopped for almost a year as a result. On August 27, 1922, the Argonaut was again struck by fire, this time uncontrollable. Forty-seven miners were trapped below and perished, and it took three weeks for a tunnel to be excavated to their location. It is the worst mining disaster in California's history.

Despite everything that occured, mining later continued at both the Kennedy and Argonaut, lasting until 1942 when they were closed due to World War II; at the time, the Kennedy was the deepest mine in the United States, with a vertical depth of 5,912 feet. Since then, Jackson has held on as the commercial center of Amador County. Today the city of over 4500 is one of the most popular places on the Gold Rush, and its entire historic downtown was added to the National Register of Historic Places in 2000.