Colfax was home to the Maidu Indian tribe. Alder Grove, later Illinoistown, began as a winter camp for trappers and miners. This was the site of the first stage coach robbery in the gold country. In April 1852, the Reelfoot Williams Gang stole $7,000 in gold bullion. They were gunned down a few days later in Yuba City.
In 1865, Schuyler Colfax, Speaker of the House of Representatives and eventual Vice President under Ulysses S. Grant, came to Illinoistown while inspecting Central Pacific Railroad construction. On that occasion, the town was renamed for him.
The town became known as the gateway to the Sierra Mountains, and it is still appropriate to call it that today. Area farms are famous for their crops of Barlett pears, Hungarian prunes and Tokay grapes.