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In 1875, French financier Jean Baptiste Paulin Caperon, better known as Peter Coutts, purchased land in Mayfield and four other parcels around three sides of today's College Terrace – more than a thousand acres extending from today's Page Mill Road to Serra Street and from El Camino Real to the foothills. His fanciful brick 50-foot-tall brick tower near Matadero Creek likely marked the south corner of his property. founded Stanford University in 1891, dedicated to his son who died of typhoid fever at age 15 in 1884.Leland Stanford started buying land in the area in 1876 for a horse farm, called the Palo Alto Stock Farm. In 1886, Stanford came to Mayfield, interested in founding his university there.Stanford set up his university, Stanford University, and a train stop (on University Avenue) by his new town.This new community was initially called University Park (the name "Palo Alto" at that time was attached to what is now College Terrace), but, was incorporated in 1894 with the name Palo Alto.During the Mexican–American War, the United States seized Alta California in 1846; however, this was not legalized until the Treaty of Guadalupe Hidalgo was signed on July 4, 1848.

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As of the 2010 census, the city's total resident population is 64,403.Prior to the arrival of Europeans, the Ohlone lived on the San Francisco peninsula; in particular, the Puichon Ohlone lived in the Palo Alto area.The area of modern Palo Alto was first recorded by the 1769 party of Gaspar de Portolà, a 63-man, 200-horse expedition from San Diego to Monterey.The land grant, Rancho Rinconada del Arroyo de San Francisquito, of about 2,230-acre (9.0 km) on the lower reaches of San Francisquito Creek (i.e., parts of modern Menlo Park and northern Palo Alto) was given to Maria Antonia Mesa in 1841.She and her husband Rafael Soto (who had died in 1839) had settled in 1835 near present day Newell and Middlefield roads and sold supplies.

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