George W. & Margaret Coulter arrived in Stockton with their newborn son in 1849, and soon moved to Solomons Gulch on the Merced River to open a canvas tent trading post. It wasn't long before George Coulter received a letter from friend Martin Evans regarding placer discoveries at Maxwells Creek. Maxwells Creek had no store and the nearest trading point was Sonora, about thirty miles away. In 1850 the Coulters relocated to Maxwells Creek and opened their new trading post for business; his tent with an American Flag flying above became a local landmark, which Mexican miners referred to as "Banderita," or Little Flag.

Within a year, the store was doing so well that the Coulters moved to higher ground and enlarged it to include a living quarters. As the surrounding encampment grew, both George Coulter and George Maxwell (for whom the creek was named) wanted their name to be used for the settlement. The story goes that the men drew sticks to see whose name would be used, with the condition that if Maxwell lost he could name the post office if one were to be established. Needless to say, Coulter won and Coulterville was born. In 1852 when the post office finally came to fruition, it was called Maxwells Creek (though it too gained Coulter's name in 1872).

During the spring of 1853, Mary Anna Coulter became the first child born in Coulterville. By now the town had made the transition from placer mining to quartz mining and developed as a significant supply center. The town had ten hotels, twenty-five saloons, and a number of other businesses as well as a population of a few thousand, many of whom were Chinese - Coulterville boasted one of the largest Chinatowns on the Mother Lode.

As with many mining towns, Coulterville was plagued by disastrous fires. Three fires, all in July and twenty years apart in 1859, 1879, and 1899 ravaged the town but it always managed to rebuild. Local legend says that the 1899 fire started the "Gold Rush of 1899" in Coulterville. Apparently, a cache of gold coins was hidden in the walls of one of the old adobe buildings that was destroyed. When detritus from the fire was used to fill roadways and subsequently washed away by rain, gold coins were found and soon prospectors were digging away at the roadways until they were impassible in the hopes of finding more.

In modern times, Coulterville has declined to a small population of only around 200. Its position on the route between the Bay Area and Yosemite makes it a popular stopping point for tourists. Many historical buildings remain, including the extravagant Hotel Jeffery which was a popular stop until it was damaged by fire in November 2014; it hasn't reopened.