A year after neighboring Randolph was established a mile south in 1853, a trading post came into being when William Arms built a general store, hotel, and blacksmith shop. A small ranching community came into being, and early residents suggested the name 'Armsville' after the first settler. Arms himself suggested Sierraville instead, and that name was chosen. In 1862, the Sierra Valley post office opened at Sierraville, serving not only that community but Randolph as well. During the next several years, Sierraville was an important supplier of hay and grain for the Comstock Lode and Carson City. It also grew as a tourist destination with the development of Campbell Hot Springs (now Sierra Hot Springs), just 1½ miles away.

On August 31, 1881, a conflagration struck Sierraville and wiped out most of the town. Nevertheless, the town was rebuilt and continued to thrive as a ranching center. In 1899, the post office took the town's name and eventually Sierraville grew to include Randolph, with the school being built halfway between the two. Today, about 200 people live in town, and a small cluster of historic buildings remain at the crossroads where Arms established his trading post nearly 170 years ago.